Bernstein sees IREN pivoting from Bitcoin mining to $3.7B AI cloud business

IREN could become the next major Bitcoin miner to transition into AI infrastructure following its multi-billion-dollar deal with Microsoft, underscoring a broader shift in mining economics, according to a new research report from Bernstein.

The Bernstein analysts point to IREN’s rapidly expanding AI cloud division, where around 150,000 GPUs are already contracted, supporting an estimated $3.7 billion in annual revenue run rate once fully functional.

A significant portion of this capacity is tied to a long-term agreement with Microsoft, which has committed to using GPU capacity for AI workloads over five years. The deal also includes substantial customer prepayments, helping fund the infrastructure buildout.

In total, IREN’s roughly $5.8 billion GPU investment is largely funded through a combination of Microsoft customer prepayments and GPU-backed financing facilities, alongside additional cash and capital sources, helping keep borrowing costs relatively low.

Bernstein expects this shift to fundamentally reshape the company’s business model.

“IREN will eventually sunset the Bitcoin mining business as it retrofits existing sites to accelerate cloud deployment,” the analysts wrote.

Rather than shutting down operations outright, IREN is repurposing its existing mining infrastructure, particularly in Texas and British Columbia, by replacing ASIC mining rigs with GPUs designed for AI workloads.

Bernstein expects IREN’s AI cloud revenue to be its primary source of income in the coming years. Source: Bernstein

Monday’s report suggests Bitcoin mining will gradually fade into a legacy segment, with mining revenue declining over time as power capacity is redirected toward higher-margin, contracted AI computing.

IREN is not alone in exploring this pivot. Several mining companies, including TeraWulf and HIVE Digital, have begun reallocating power and capital toward AI and high-performance computing, often alongside their existing Bitcoin mining operations.

Related: AI data center gold rush sparks debate over impact on Bitcoin mining

Bernstein sees nearly 100% upside for IREN stock

Bernstein assigned IREN stock a $100 price target, pointing to significant upside as the company shifts away from Bitcoin mining and toward AI infrastructure.

With the stock currently trading below $50, the target implies a nearly 100% increase from current levels.

The analysts maintained an Outperform rating, even after reducing their previous $125 target, reflecting a more conservative view on dilution and the gradual wind-down of Bitcoin mining.

IREN stock. Source: Google Finance

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