IREN may exit Bitcoin mining for AI cloud
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Analysts at Bernstein lowered their price target for IREN Limited from $125 to $100 while maintaining the stock as a top pick among AI-focused miners. The firm expects IREN to gradually phase out Bitcoin mining and focus on AI cloud infrastructure.
Bernstein updates outlook on IREN
Bernstein revised its valuation of IREN, citing factors unrelated to business fundamentals:
- reduced exposure to mining
- increased share count from equity issuance
The company remains a leader in the AI transition. A key driver is its contract with Microsoft.
Key details:
- 77,000 GPUs contracted
- five-year agreement
- about $1.94 billion in annual revenue
Remaining GPU capacity is being sold to cloud customers.
Declining mining margins drive change
IREN’s strategy reflects a broader industry shift. Mining companies are diversifying into AI and cloud services.
Key drivers include:
- declining mining margins
- rising demand for AI compute
- high infrastructure costs
To support expansion, IREN signed a $5.8 billion deal with Dell for Nvidia processors.
It also secured $3.6 billion in GPU-backed financing. Combined with prepayments, this covers about 95% of project costs.
Miners will accelerate shift to AI
IREN’s transition may accelerate the shift across the mining sector.
Key implications:
- reduced importance of mining revenue
- increased investment in data centers
- stronger competition for GPUs and energy
- revaluation of mining companies
Bernstein forecasts AI revenue to reach:
- $2.6 billion in 2027
- $6 billion by 2030
Margins could stabilize near 82%.
Industry shifts toward AI infrastructure
Bernstein assigns zero value to mining in IREN’s model. The company is replacing ASIC miners with GPU infrastructure.
Mining revenue is expected to decline to zero by 2030.
Key growth factors:
- 4.5 GW of power capacity
- expansion across US and Canada
- scaling AI cloud services
Many mining companies are following similar paths. Some are exiting mining entirely.
The industry is undergoing a major transformation. AI and high-performance computing are becoming the primary growth drivers.
