IREN’s AI Hypergrowth Rally Faces a Valuation Test

IREN ( (IREN) ) has risen by 12.51%. Read on to learn why.

IREN shares climbed 12.51% over the past week as traders piled into the fast-growing AI cloud name despite ongoing concerns about how far the current rally can run. The stock’s sharp moves were accompanied by heavy options activity, with call trading generally outpacing puts and implied volatility easing from very elevated levels. That drop in implied volatility suggests investors now expect slightly smaller day‑to‑day swings, even as they continue to hedge against potential downside.

A major driver of interest is IREN’s “hypergrowth” profile, underpinned by a large AI cloud deal with Microsoft that is expected to push revenue from about $501 million in fiscal 2025 to roughly $3.8 billion in 2028. This kind of growth story has helped the stock deliver a year‑to‑date gain of more than 200%, putting it firmly on the radar of momentum traders and retail investors looking for exposure to the AI boom. Technical indicators currently flash a “Buy” signal, and average daily trading volumes remain high, reinforcing IREN’s status as one of the market’s more actively traded AI plays.

At the same time, the rally is not without skeptics. Goldman Sachs initiated coverage with a Neutral rating and a $39 price target, describing IREN’s valuation as “relatively full” given that much of the anticipated growth from the Microsoft deal already appears priced in. The bank also highlighted uncertainty around the company’s prospects once that agreement matures, especially against a backdrop of wider volatility in AI-related stocks. For now, however, the bulls have the upper hand, with IREN’s strong price performance showing that investors are still willing to pay up for high-growth AI exposure despite the risks.