IREN Stock Takes an 8% Hit as AI Investment Drags on Earnings

IREN’s costly shift toward AI cloud computing weighed on its latest earnings, even as the company reached a major milestone in moving beyond its Bitcoin mining roots.

IREN shares declined 8% in Friday’s premarket trading after the fiscal fourth-quarter results showed how heavily the AI expansion is affecting near-term profitability.

The company generated $137.2 million in quarterly revenue, down 5% from the previous quarter. Adjusted EBITDA fell 68% to $19.2 million as IREN increased spending on employees and AI infrastructure ahead of the expected business ramp. On a year-over-year basis, revenue plunged 85%, while adjusted EBITDA dropped 93%.

IREN reported a net loss of $684 million, which included a $450.4 million non-cash impairment charge. The majority of the charge was connected to the retirement of Bitcoin mining equipment as the company repurposes its mining facilities and power capacity for AI infrastructure.

The transition is creating significant costs before the new business reaches its full earning potential. IREN said it has $4 billion in contracted annualized run-rate revenue linked to its 2026 capacity, but just $1 billion of that capacity is currently operational.

Despite the weak bottom line, AI has quickly become the company’s largest source of quarterly revenue. AI cloud revenue more than doubled from the previous quarter to $70.5 million, surpassing Bitcoin mining revenue of $66.7 million for the first time.

AI cloud services accounted for 51.4% of IREN’s total quarterly revenue, compared with 48.6% from mining. Bitcoin mining revenue dropped 40% from the previous quarter as the company redirected power and infrastructure toward its rapidly growing AI operations.