- IREN shares dropped about 5% in Wednesday’s after-market session.
- IREN forecast $3.7 billion annualized revenue from its AI Cloud segment this year.
- Stocktwits sentiment for the ticker flipped to ‘bullish’ from ‘bearish.’
IREN Ltd. on Wednesday said it is buying 50,000 advanced gaming processing units (GPUs) from Nvidia Corp., which would bring the company’s capacity to 150,000 units and annualized revenue from its AI Cloud segment to over $3.7 billion this year.
However, the Australian bitcoin miner and contract data center operator also announced plans to raise up to $6 billion through an at-the-market stock offering to fund its capacity expansion, which proved to be a drag on the stock.
IREN shares declined about 5% in the after-market session, after rising nearly 13% in the regular session.
IREN Defends Moves, Says Capturing AI Opportunity Essential
“Time-to-compute is an increasingly important factor in today’s AI cloud market. Early procurement enables IREN to bring cloud capacity online with greater speed and certainty, ensuring deployment timelines remain on track as customer agreements progress,” the company said in a statement.
IREN has emerged as a closely watched stock, given its exposure to AI data centers and bitcoin, two of the market’s most closely tracked themes. In November, the company signed a $9.7 billion deal to offer its data centers to Microsoft, and a $5.8 billion purchase of data center equipment from Dell.
In the last quarter, IREN’s revenue increased year over year to $184.7 million, up from $116.1 million, while net loss increased nearly five times to $0.52 per share.
Retail Investors See Explosive Growth For IREN
On Stocktwits, retail investors dismissed concerns about higher spending and equity dilution, which seemed to be behind the after-market stock decline. The retail sentiment IREN flipped to ‘bullish’ from ‘bearish’ as traders argued that the company’s moves would spark explosive growth.
“Ever heard of ‘you gotta spend money to make money?’ That is all this is,” said a user. “This business requires lots of capex (and) IREN is looking to be the biggest and most vertically integrated company in this space.”
“$IREN expanding capacity to 150k GPU is a strong signal the company is fully leaning into AI infrastructure,” said another user. “Technically, the stock has been basing around $39 - $44 for weeks and just bounced back toward $44 (I'm ignoring the AH panic sellers). A move through the mid 40s could open the path to $47 and potentially the $50-$52 area... Holding long and strong!”
Meanwhile, the at-the-market offering is for up to $6 billion and gives the company the option to exercise it at will or not exercise at all, a user clarified, saying that investor panic is unwarranted. “You need to chill. Lots of retail will get flushed tomorrow before it bounces back up,” the user said.
As of year-to-date, IREN stock has gained 16%.
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