IREN stock jumped over 4%, mirroring gains at other neocloud companies like CoreWeave and Nebius following strong Nvidia earnings and guidance. Shares climbed to $43.25, but this rally will be put to the test when the company publishes its own earnings later today.
IREN’s revenue to drop on Bitcoin sell-off as pivot to AI continues
IREN, formerly known as Iris Energy, will publish its financial results later today, August 27, and analysts expect it to show that its revenue dropped in the quarter because of Bitcoin weakness.
While IREN is now known for its role as an AI company, it is currently making most of its money through Bitcoin mining. Bitcoin remained in a deep bear market during the quarter, meaning that it was making less money for all coins it generated.
Yahoo Finance data shows that analysts expect the upcoming results to show that its revenue dropped by 28% to $135 million. The most optimistic analyst predicts that its revenue will come in at $185 million, still lower than the $188 million it made last year.
On the positive side, there are signs that Bitcoin is doing well, which may help to boost its revenue this year. Bitcoin jumped to $80,200 today, up sharply from the year-to-date low of $57,300.
Another positive sign is that analysts expect that its annual revenue metrics will continue thriving in the coming year. Its annual revenue is expected to jump to $669 million this year, followed by $2.33 billion next year.
IREN has made progress
IREN has made some important progress in the past few months. It recently completed the acquisition of Mirantis, a deal that will help to manage AI workloads. It also inked a $2.8 billion deal with several AI labs, adding to revenue backlog. As part of the deal, the company added its AI Cloud annualized run-rate revenue target to $4 billion from the previous $3.7 billion. In a statement, the CEO said:
“Our vertically integrated AI Cloud platform is scaling at pace. In the past 12 months we have expanded from approximately 3MW of self-built AI Cloud capacity to 480MW being delivered this year, with 1.2GW targeted for 2027, broadening our customer base across hyperscalers, enterprises and AI developers.”
IREN will also benefit from the ongoing AI growth as evidenced by this week’s Nvidia earnings report. In a statement, the company said that its revenue jumped to $96 billion, higher than the expected $92 billion. The company also boosted its forward guidance, with its FY’28 growth being 70%, a sign that it expects the AI boom to continue.
There are signs that demand for computing is rising, which may benefit IREN. On Wednesday, Anthropic reached a $46 billion deal with Nscale, a competitor.
Still, the risk is that the company will need to raise more cash in the future to boost its balance sheet. Its competitors like CoreWeave and Nebius have all raised substantial sums of money in the past few months.
IREN stock technical analysis: mixed signals
The daily chart shows that the IREN stock has remained in a bear market this month. It dropped from a high of $70.58 in June to the current $40. Most notably, it has slumped below the 200-day moving average, a sign that bears remain in control.
On the positive side, the stock has remained above the crucial support level of $33.34. Also, the Supertrend indicator has turned green. Therefore, the stock will likely be highly volatile after earnings. The key support and resistance levels to watch will be at $33.35 and $50.