Jefferies: IREN’s AI cloud could lift shares 30% to $79

Jefferies initiated coverage of IREN with a $79 price target, arguing the company's strategy of building and operating its own AI cloud will be worth more than a pure data-center leasing model. The bank's valuation implies roughly 30% upside from current share levels.

Jefferies highlighted that IREN controls about 6 gigawatts of secured power globally and is currently using roughly 10% of that capacity, giving the company room to scale AI compute without sourcing new grid connections.

The bank modeled IREN's choice to run a GPU cloud in its owned facilities versus converting sites to a colocation model and found higher cash flows over a 10- to 20-year horizon for the internal AI cloud. Jefferies projected returns of about 21% on the Microsoft-backed AI cloud buildout versus roughly 13% under a colocation approach.

Jefferies noted contracts with investment-grade tenants, including Microsoft and Nvidia, support its revenue outlook and wrote, “Anchored by investment-grade tenant credit, the Microsoft and Nvidia contracts position IREN to deliver $3.1 billion of annual recurring revenue.”

On capital, Jefferies estimated roughly $250 million available for future projects after accounting for GPU and data-center spending. Matthew Sigel, head of digital asset research at VanEck, called that figure conservative and suggested available project capital could be closer to $900 million once recent equity and debt raises are included.

IREN is expanding its global footprint. This week the company agreed to acquire Spanish AI data-center developer Nostrum, adding about 490 megawatts of grid power in Europe. Earlier plans include an 800-megawatt data-center campus in South Australia intended to serve AI demand across the Asia-Pacific region.

IREN's shares rose about 4% on Wednesday, trading near $60.50 and implying roughly 30% upside to Jefferies' $79 target. Jefferies' analysis assumes the company deploys GPUs at scale in its owned facilities rather than primarily leasing capacity to third parties.

Background: IREN began as a bitcoin miner and has shifted into AI infrastructure. The company's strategy focuses on using its owned power positions and existing facilities to host high-density computing for AI workloads rather than relying mainly on colocation leasing.