IREN Stock Surges 8% Premarket On Nvidia Boost: Retail Ecstatic But Analyst Still Feels It’s Overvalued

• Nvidia has purchased warrants to invest up to $2.1 billion in IREN, which is pivoting from a bitcoin miner to a data center operator.
• IREN’s third-quarter revenue and profit were sharply below what analysts had expected.
• Stocktwits sentiment for IREN moved higher in the ‘extremely bullish’ zone.

IREN Ltd. shares rallied 8% in early premarket trading on Friday after the company’s third-quarter earnings. The Bitcoin-miner-turned-data-center operator said Nvidia purchased warrants to invest up to $2.1 billion in the company as part of a deal in which IREN purchased Nvidia’s AI servers and offered it cloud capacity for rent.

The tie-up overshadowed a significant revenue shortfall and widening losses, partly due to a decline in the Bitcoin price in recent months, which raised concerns among traders.

Still, the overall market sentiment remained upbeat. “Besides the Microsoft and Nvidia deals, we are confident that IREN will be able to land another major deal over the next few months for the remaining 400 MW of capacity at Childress, given the supply/demand imbalance of the cloud infrastructure market,” Morningstar analysts said in an investor note on Friday. The research firm raised its fair value estimate for IREN from $26 to $41, implying a nearly 33% downside from current levels, saying the “shares remain overvalued.”

The Nvidia deal comes after IREN inked a $9.7 billion cloud deal with Microsoft. For the AI chip giant, it is only the latest investment-and-commercial partnership deal, similar to those it has struck with CoreWeave, Nebius and others.

IREN Q3 Results Recap

Iren reported $144.8 million in revenue for its fiscal third quarter, falling short of Wall Street's estimate of $220.2 million and below the $184.7 million in Q2. 

The company's net loss of $247.8 million also deepened from the previous quarter's $155.4 million. Wall Street analysts were expecting $52.9 million in losses.

Iren also announced the acquisition of Spain-based Ingenostrum on Thursday, adding 490 megawatts of power in Spain. This brings IREN's total power portfolio to 5 gigawatts.

Retail View On IREN

On Stocktwits, the retail sentiment for IREN climbed multiple points higher in the ‘extremely bullish’ zone (95/100), amid ‘extremely high’ message volume. Like in previous instances with other companies, Nvidia’s tie-up with Iren drew sharply bullish commentary for the cloud company. However, some also pointed to sector-wide stresses, citing CoreWeave's weak quarterly outlook.

“IREN this is where bulls forget that MMs own Fridays. crwv had bad earnings which is bad for the whole sector and believe it or not iren had bad earnings also plus the market will be bloody red tomorrow because us and Iran have both fired on each other in the last couple hours,” a trader said.

A bullish user wrote: “$IREN earnings confirmed the market is no longer valuing this as just a Bitcoin miner. The real story is AI infrastructure, power capacity, NVIDIA backing, and long term hyperscaler demand. Near term numbers still look messy because they are spending aggressively ahead of revenue, but bulls are betting the AI cloud business eventually dwarfs the legacy mining business.”

“So it comes down to execution: If they deliver, current valuation may eventually look cheap. If they disappoint, these AI infra names can easily re rate 40% to 70%,” they added.

To be sure, momentum was building ahead of earnings. IREN shares gained nearly 90% from a recent low on March 30 until Thursday. Overall, the stock is up 50% year-to-date.

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