IREN Ltd (NASDAQ:IREN) shares plummeted 5.36% in pre-market trading on Friday, despite the company reporting stronger-than-expected third-quarter results. The significant drop comes as investors appear to be taking profits following the stock's recent surge and expressing concerns about the sustainability of the company's growth.

IREN, a data center operator and bitcoin miner, reported first-quarter fiscal 2026 revenue that exceeded analyst expectations. The company's performance was driven by contributions from both its Bitcoin mining operations and artificial intelligence initiatives. However, the market's reaction suggests that investors may be reassessing the stock's valuation after its impressive year-to-date gain of 581.9%.

While IREN's quarterly adjusted earnings of $1.08 per share significantly outpaced the mean analyst expectation of $0.16, the market's response indicates that some investors may be questioning whether this level of performance is sustainable in the long term. The company's shares had already risen by 42.7% this quarter prior to the earnings release, potentially setting the stage for a pullback as traders lock in gains.