IREN Limited (NASDAQ: IREN) Stock: Surges in AI Ambitions Amid Microsoft $9.7B Deal

TLDR

• IREN’s $9.7B Microsoft deal powers massive AI infrastructure expansion.
• Q1 FY26 revenue surges 355%, marking record growth for IREN.
• GPU shift and AI cloud push redefine IREN’s data center strategy.
• IREN’s strong cash reserves fuel next-gen AI infrastructure builds.
• Strategic AI contracts position IREN as a top hyperscale player.

IREN Limited posted record-breaking financial results for Q1 FY26, while unveiling major developments across its AI infrastructure projects. Despite the strong fundamentals, the stock declined by 12.37% to close at $66.96.

IREN Limited, IREN

Microsoft Contract Boosts Revenue Outlook and Capacity

IREN secured a $9.7 billion agreement with Microsoft, marking a pivotal expansion into high-performance AI infrastructure services. The five-year contract includes phased deployments at the Childress site, with a 20% prepayment from the customer. This deal is expected to add $1.9 billion to annualized recurring revenue.

The agreement supports accelerated buildout of liquid-cooled data centers, tailored for high-density AI workloads. The company plans to deliver 140,000 GPUs by end-2026, covering just 16% of its total 3GW grid-connected power. This leaves significant headroom to scale up future deployments.

Additional partnerships with Together AI, Fireworks AI, and Fluidstack will drive IREN’s AI Cloud annualized recurring revenue above $500 million by Q1 2026. These multi-year contracts reflect growing demand for specialized AI compute infrastructure. IREN continues to diversify its customer base across hyperscale segments.

Strong Financial Performance Underpins Growth Strategy

Revenue for Q1 FY26 jumped 355% year-over-year to reach $240.3 million, setting a company record. Net income surged to $384.6 million, reversing a $51.7 million loss in the same quarter last year. Adjusted EBITDA rose to $91.7 million, while total EBITDA reached $662.7 million.

The performance includes unrealized gains tied to financial instruments linked with convertible notes. IREN’s capital position remains strong, with $1.8 billion in cash and equivalents as of October 31, 2025. These funds will support upcoming capital expenditures and platform growth.

The company also raised $1 billion through zero-coupon convertible notes issued in mid-October. An additional $200 million in GPU financing brings total secured hardware funding to $400 million. Management aims to blend cash flow, prepayments, and financing for further expansion.

Infrastructure Projects Advance Toward AI-Centric Model

At its 160MW British Columbia site, IREN is transitioning from ASIC-based systems to GPUs, targeting completion by the end of 2026. Meanwhile, construction continues at the 750MW Childress campus, which houses the Microsoft deployment. Enhanced designs now include Tier 3-equivalent reliability and flexible rack densities.

IREN is also progressing on the 2GW Sweetwater Hub, a key long-term asset in its AI roadmap. The first substation (1,400MW) aims to go live in April 2026, followed by a second 600MW site in 2027. These facilities are positioned to support future GPU expansions as demand scales.

The company continues to upgrade infrastructure with advanced cooling systems and high-capacity superclusters. These improvements reflect IREN’s commitment to meeting growing computational demands. Ongoing developments reinforce its position as a key player in the evolving AI cloud space.

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