Shares of Sydney-based data center operator IREN Limited (IREN) have soared by 390.22% since the start of the year. Yet, JPMorgan (JPM) has reaffirmed its Underweight rating on the stock.
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While IREN shares climbed almost 15% earlier on Monday after the company announced updates to its stock plan, in recent weeks, the stock has remained highly volatile. This is despite IREN swinging to a profit in its most recent quarter and signing a $9.7 billion deal with Microsoft (MSFT).
IREN is not alone. Its American rival CoreWeave (CRWV) and Amsterdam-based competitor Nebius (NBIS) have also been battling a post-earnings rut.
JPMorgan Bearish despite Price Target Raise
Reacting to these updates, JPMorgan analyst Reginald Smith raised his price target on IREN by 39% from $28 to $39 per share, citing the “flurry of deal activities” in the neocloud provider’s high-performance computing business.
Smith noted that this factor gives his team greater confidence in IREN, which was previously focused on mining bitcoin but has shifted its business model to supplying the gigantic cloud capacity needed for large-scale AI workloads by hyperscalers such as Microsoft and Meta (META). Nonetheless, the four-star analyst’s rating represents over 18% downside risk from IREN’s current trading levels.
Similar to IREN, CoreWeave’s shares have jumped over 100% since January, while Nebius has skyrocketed even higher by more than 241%. However, popular hedge fund manager Michael Burry continues to be bearish on AI stocks, contending that true demand may be much smaller than AI companies estimate.
Why Other Analysts Are More Upbeat
Smith’s rating is a far cry from Citizens JMP analyst Gregory Miller’s recent price target of $80 per share — implying about 67% upside — and Bernstein analyst Gautam Chhugani‘s $125 price target at over 155% upside. Bernstein cheered IREN’s stand-out model of operating its own vertically integrated AI cloud infrastructure, including power, cooling, and servers.
Is IREN a Good Stock to Buy?
Across Wall Street, analysts remain cautious on IREN and currently hold a Moderate Buy consensus rating on the stock. This is based on nine Buys, two Holds, and two Sells issued by analysts over the past three months.
However, at $84.45, the average IREN price target implies more than 76% upside potential from the current trading level.
