IREN Builds AI Cloud Momentum: Can Growth Accelerate From Here?

IREN Limited’s IREN AI cloud expansion has gained a more concrete footing with the recent delivery and Microsoft’s acceptance of Horizon 1. The project is the first of four 50 MW IT-load, direct-to-chip liquid-cooled deployments planned at IREN’s Childress, TX, campus in 2026 under a five-year, $9.7 billion cloud services contract. Horizons 2-4 are scheduled for delivery later this year. 

The Horizon 1 milestone also came with NVIDIA Exemplar Cloud status for IREN’s GB300 NVL72 deployment. NVIDIA awarded the designation after testing the infrastructure at Horizon 1. For IREN, the validation is important as it shows that the new deployment can meet required standards for AI workloads across performance, reliability and scale.

Execution at Childress now feeds into a much larger capacity plan. IREN is targeting 480 MW of gross AI cloud capacity by the end of 2026, up from about 3 MW of self-built capacity a year earlier, and plans to reach 1.2 GW in 2027. Delivering those projects on schedule will be key to converting contracted demand into revenues.

Demand already provides some visibility. IREN raised its year-end 2026 annualized run-rate revenue target to more than $4 billion after signing $2.8 billion of new multi-year AI cloud contracts. Roughly 85% of the target is under contract, while recent agreements include customer prepayments equal to about 45% of associated GPU capital expenditure.

IREN is also building beyond physical infrastructure. Its Mirantis acquisition adds AI workload orchestration, monitoring and customer support capabilities while bringing experience from more than 1,500 enterprise customers. Combining that software layer with new capacity such as Horizon 1 could widen IREN’s ability to serve hyperscalers, enterprises and AI developers through both bare-metal and managed cloud services.

Peer Check: AI Infrastructure Growth and Contracted Demand

CoreWeave’s CRWV AI infrastructure expansion continues at scale. CoreWeave reported second-quarter 2026 revenues of $2.58 billion, up 112% year over year, while the backlog reached approximately $104 billion. CoreWeave also expanded active power to 1.5 GW and contracted power to 3.7 GW, highlighting strong demand and infrastructure execution.

Applied Digital Corporation APLD is strengthening its contracted AI infrastructure pipeline. Applied Digital now has 1.4 GW of contracted critical IT load representing about $36 billion in lease revenues. Applied Digital also signed a 210 MW, 15-year Delta Forge 2 lease worth about $5.2 billion, supporting longer-term growth visibility.

IREN’s Price Performance, Valuation and Estimates

Shares of IREN have declined 17.9% over the past three months, underperforming the broader industry and the S&P 500 composite. 

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In terms of forward 12-month Price/Sales (P/S), IREN is currently trading at 4.28X, which is at a premium to the industry average of 2.58X.

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Estimates for IREN’s 2026 and 2027 earnings have been revised downward in the past 30 days. However, the company is expected to report a profit next year.

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Currently, IREN carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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