By Adam Clark

IREN stock wobbled Friday after a disappointing earnings report spurred worries about the company's cryptocurrency mining operations, despite management's optimism over a shift toward artificial-intelligence computing.

The question is whether its progress on providing AI computing capacity can outweigh the drag from falling cryptocurrency prices. IREN has been working to transition into a cloud-computing company over the past two years due to the enormous demand for data-center capacity.

IREN shares fell 0.2% to $39.70 in premarket trading Friday, after sliding 11% the previous day.

The sharp drop reflected concern over IREN's mining operations, which account for the bulk of its revenue. The steep drop in crypto prices and the shift in computing capacity toward AI meant that the company saw lower sales in the December quarter.

Late Thursday, the company reported a net loss of $155.4 million in its second fiscal quarter. Revenue came to $184.7 million, down from $240.3 million in the preceding quarter, reflecting Bitcoin's amid the fall in Bitcoin.

However, IREN would prefer that investors focus on its pivot toward providing computing and energy for AI services. Last year, IREN agreed a $9.7 billion deal to sell cloud capacity to Microsoft. The company said Thursday that it has secured $3.6 billion in financing, which on top of Microsoft's prepayment, covers 95% of the capital expenditure needed for the chips involved in the deal.

IREN's AI cloud services revenue came to $17.3 million for the quarter, up from $2.7 million in the year-ago period. The company is targeting $3.4 billion in annualized revenue from AI cloud computing by the end of this year.

IREN builds and operates its own renewable-powered data centers. It also has one of the largest pipelines of contracted power among the so-called "neoclouds" which provide additional AI computing capacity to large technology companies, at more than 4.5 gigawatts. However, questions continue to swirl around the sustainability of AI spending across the tech sector. IREN isn't immune to those worries.

"Since we last revisited our valuation on IREN, we have seen AI sentiment unwind, with concerns growing over capex, financing cost, and ultimately returns generated by AI investments," wrote Cantor analyst Brett Knoblauch in a research note.

Knoblauch lowered his target price on IREN to $82 from $136, while keeping an Overweight rating on the stock.

Write to Adam Clark at adam.clark@barrons.com

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February 06, 2026 08:46 ET (13:46 GMT)

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