Jefferies initiated coverage of bitcoin miner-turned-AI infrastructure provider IREN with a $79 price target, projecting that the company's strategy of operating its own AI cloud infrastructure will be more valuable than leasing data center capacity in the long-term.
The investment bank said (IREN) is unique among its publicly traded AI infrastructure peers, mostly due to its large power portfolio, owned data center assets, and growing GPU cloud business.
Jefferies estimates that the company has access to roughly 6 gigawatts of secured power globally, but that only around 10% of that is being utilized.
According to the firm's analysis, IREN's GPU cloud strategy could generate higher total cash flows than reverting facilities to focus on a colocation model when looking at a timeline of 10 to 20 years.
At that point, the gap starts to widen, with Jefferies estimating returns of roughly 21% on its Microsoft-backed AI cloud buildout versus 13% under a colocation model, according to notes shared by VanEck's Head of Digital Asset Research Matthew Sigel.
