The Pullback of IREN Linked to New Market Expectations in AI

MetaEggplant · 2026-02-22T20:07:42+00:00

IREN's stock fell about 18% to $39.79, but this decline is linked to market expectations rather than operational fundamentals. Analysts indicate a shift towards AI infrastructure, noting that AI cloud revenue doubled despite Bitcoin mining income declining. Bernstein maintains an "outperform" rating with a target price of $125, reflecting confidence in IREN's strategic transition.

MetaEggplant

2026-02-22 20:07:42

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IREN stock experienced a drop of approximately 18% in recent days, falling to around $39.79 per share. Although the decline was sharp, the cause is not due to a deterioration in the company’s operational fundamentals but rather market expectations linked to the lack of significant announcements regarding artificial intelligence partnerships, according to reports from PANews.

Strategic Shift Toward AI Infrastructure

Bernstein analysts have highlighted a fundamental change in how investors evaluate IREN. It is no longer Bitcoin mining profit volatility that defines the investment strategy but progress in the transition toward AI-powered cloud infrastructure. This reorientation reflects a deeper market reality: the company is undergoing a significant transformation to capture opportunities in the artificial intelligence sector.

Financial Performance Tied to AI Cloud

Despite a contraction in Bitcoin mining revenue quarter-over-quarter, revenue from AI cloud services doubled in the analyzed period. IREN has secured approximately $2.3 billion in annual recurring AI cloud contracts, a figure that underscores the potential of transitioning into this segment. Projections for Q4 2026 indicate reaching $3.4 billion in ARR (Annual Recurring Revenue), equivalent to deploying around 140,000 GPU units.

Analyst Ratings Remain Optimistic

Despite the recent decline in stock price, Bernstein has maintained its “outperform” rating for IREN with a target price of $125. Analysts consider that the recent drop represents a market expectation reset rather than an indicator of weakening operational capabilities. This stance reflects confidence that IREN will continue executing its strategic shift toward AI infrastructure, a segment where growth and opportunities remain tied to expanding computational capabilities within the artificial intelligence ecosystem.

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