IREN's plans to spend $25 billion to $30 billion building out its AI cloud business in fiscal 2027 may have "spooked the market," according to analysts at research and brokerage firm Bernstein, who argue investors are overlooking improving economics as the bitcoin miner scales its compute infrastructure.
"The high capex number may have spooked the market, but the investors seem to ignore improving unit economics with faster payback on incremental capex," analysts led by Gautam Chhugani wrote in a note to clients on Friday, viewed by The Block.
Bernstein estimates the payback period on GPU capital expenditure has fallen to around two years, compared with roughly three years under IREN's 2025 Microsoft contract.
IREN's fiscal 2026 results, released Thursday, showed AI cloud services revenue increased nearly eightfold to $128.8 million in fiscal 2026 from $16.4 million the previous year, while bitcoin mining generated $578.2 million, up 19% year over year.
IREN's total revenue rose to $707 million from $501 million, though the company swung to a $702.6 million net loss from $86.9 million in net income in 2025, partly reflecting $638.8 million in impairments as it decommissioned bitcoin mining hardware to support its AI cloud expansion, the firm said.
