IREN shares fell 8% in Friday pre-market trading after fiscal fourth-quarter results exposed the near-term cost of the company's shift from bitcoin mining to AI cloud services. Adjusted EBITDA dropped 68% quarter over quarter and IREN posted a $684 million net loss, even as AI cloud revenue overtook bitcoin mining revenue for the first time. Citizens reiterated a Market Outperform rating and an $80 price target on the stock following the results.
IREN shares fell 8% during Friday pre-market trading after the company's fiscal fourth-quarter results laid bare the near-term cost of transforming from a bitcoin miner into an AI cloud provider.
Earnings show the cost of the AI pivot
Total quarterly revenue fell 5% from the previous quarter to $137.2 million. The figure missed Wall Street's expectations of $157.14 million. Adjusted EBITDA dropped 68% quarter over quarter to $19.2 million amid rising employee costs and investment ahead of the AI cloud ramp.
IREN also reported a $684 million net loss. The result included a $450.4 million non-cash impairment tied primarily to decommissioning bitcoin mining hardware, as the company converts mining sites to support AI infrastructure.
The company said it holds $4 billion of contracted annualized run-rate revenue tied to its 2026 capacity. Only $1 billion of that is currently operational.
AI cloud revenue overtakes mining
However, the results marked a milestone in IREN's transformation: AI cloud revenue more than doubled quarter over quarter to $70.5 million, overtaking bitcoin mining revenue of $66.7 million for the first time. The AI cloud segment's revenue climbed from $33.6 million in the prior quarter, Citizens noted.
AI cloud services contributed 51.4% of quarterly revenue, while mining generated 48.6%. Mining revenue fell 40% from the previous quarter as IREN redirected power and infrastructure toward its AI business.
Citizens reiterates $80 price target
Citizens reiterated a Market Outperform rating and an $80 price target on IREN following the results. The firm said near-term reported results may remain uneven as additional capacity is commissioned, but that IREN remains well positioned to participate in the AI infrastructure market's growth.
The $80 price target implies roughly 5.5 times estimated fiscal year 2028 EV/EBITDA, supported by improving contract economics and financing for future deployments. IREN's revenue surged 105% over the past twelve months to $757 million, supporting a $14.5 billion market cap.
The stock has delivered a 76% return over the past year. It currently trades at $40.53, down 47% from its 52-week high.
Sources: CoinDesk, Investing.com
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