IREN Ltd (NASDAQ: IREN) saw its stock surge 5.29% in after-hours trading on Thursday following the release of its exceptional first-quarter fiscal year 2026 financial results. The company, which has successfully pivoted from Bitcoin mining to AI cloud infrastructure, reported earnings that significantly surpassed analyst expectations.

For the quarter ended September 30, IREN reported a net income of $384.6 million, a remarkable turnaround from a $51.7 million loss in the same period last year. Revenue skyrocketed by 355% year-over-year to $240.3 million, beating the analyst consensus of $235.5 million. The company's earnings per share of $1.08 crushed estimates of $0.14, representing a staggering 682.61% beat.

IREN's success story is twofold. While its Bitcoin mining operations contributed $232.9 million to the quarter's revenue, the company's strategic shift towards AI cloud services is gaining significant traction. The recent $9.7 billion contract with Microsoft for GPU services at its Childress, Texas facility underscores this pivot. IREN has set ambitious targets, aiming to achieve $3.4 billion in AI Cloud Annual Recurring Revenue (ARR) by the end of 2026, with $1.9 billion expected from the Microsoft contract alone. The company also anticipates generating over $500 million in AI Cloud ARR from new contracts by Q1 2026, signaling strong growth potential in its expanding data center operations and GPU transition initiatives.

As IREN continues to execute its growth strategy with discipline, investors are clearly optimistic about its future in the rapidly expanding AI infrastructure sector. The company's ability to leverage its Bitcoin mining expertise into the AI cloud space, coupled with its strong financial performance and strategic partnerships, positions it well for continued growth in the evolving tech landscape.