Iren Limited’s (IREN) shares, which soared as high as 26% in late trading on Thursday after the Australian AI cloud company secured a $3.4 billion cloud services deal from chipmaking giant (NVDA), jumped by another 14% during Friday’s pre-market session. This comes as analysts reaffirmed their Buy ratings on Iren, highlighting the benefits of the deal for the stock.
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New trading tool for IREN bulls/bearsIren Strikes Multibillion-Dollar AI Deal with Nvidia
As part of the five-year contract and partnership, Nvidia secured the rights to pump about $2.1 billion into Iren through share purchases subject to regulatory approval. The deal, alongside Iren’s plan to acquire Spanish data center developer Ingenostrum, cheered investors despite Iren’s third-quarter earnings miss.
However, investors are taking solace in the deal, which comes less than a year after Iren won a $9.7 billion AI cloud deal from tech giant Microsoft (MSFT).
Why Analysts Are Bullish on Iren’s Stock
Reacting to the results, Compass Point analyst Michael Donovan maintained both his Buy rating and $105 price target on Iren, with the target implying roughly 85% upside in the months ahead. Donovan argued that the deal with Nvidia “further validates Iren’s ability to monetize air-cooled infrastructure with a strategic AI customer at scale.”
This is as Nvidia plans to deploy Iren’s air-cooled Blackwell systems for a capacity of roughly 60 megawatts at the neocloud company’s data center in Childress, Texas. The analyst also pointed to Iren’s AI cloud revenue now accounting for 23% of its earnings after expanding by almost 100% to $33.6 million.
Similarly, H.C. Wainwright’s Mike Colonnese reaffirmed his Buy rating on Iren and lifted his price target from $80 to $85, suggesting about 50% upside. The five-star analyst contended that Iren likely secured about a 25% pricing increase in its cloud deal with Nvidia compared to that of Microsoft.
The researcher also pointed to Iren sticking to its guidance of $3.7 billion in annual recurring revenue for its AI Cloud division. This projection does not include the Nvidia deal, and Iren already has about 65% of that revenue under contract, Colonnese further pointed out.
Is IREN a Good Stock to Buy Now?
On Wall Street, IREN’s shares still carry a Moderate Buy consensus rating from analysts. This is based on seven Buys and three Holds issued over the past three months.
However, the average IREN price target of $72.56 suggests about 28% upside ahead.
