IREN shares jump 34% on $3.4 billion Nvidia cloud contract

Iren (IREN 2.66%) stock rose about 34% in the week of the Nvidia announcement, underscoring investor optimism that the $3.4 billion, five‑year managed‑GPU cloud contract will lock in recurring revenue for the Australian‑born neocloud operator as it pivots from Bitcoin mining to AI infrastructure [1].

Nvidia partnership details

The deal has two parts: Iren will deliver managed GPU cloud services to Nvidia’s internal AI workloads, using air‑cooled Blackwell GPUs at its Childress, Texas campus, which adds 60 MW of capacity [1]. A second component gives Nvidia a five‑year warrant to buy up to 30 million Iren shares at $70 each—well above the current mid‑$50s price, meaning the warrants are presently out‑of‑the‑money [1]. Nvidia’s choice reflects Iren’s vertically integrated model, which includes owned land, renewable‑heavy power grids, and experience running large GPU clusters [1].

Funding and valuation pressures

Even as the Nvidia contract validates Iren’s AI‑infrastructure model, the company disclosed a $2 billion convertible‑notes offering, which triggered a sharp pull‑back after the initial rally [1]. At roughly 56 × forward earnings and a market cap near $20 billion, Iren is priced as if execution is guaranteed, a premium that may already be baked into the stock [1]. The firm’s earlier $9.7 billion Microsoft GPU cloud agreement in November 2025 helped secure the Nvidia talks, but the capital‑intensive build‑out still requires substantial financing [1].

Competitive landscape

Iren competes with peers like Nebius, which has recently secured larger deal values (e.g., a $17.4 billion Microsoft contract) but fewer gigawatts of secured power [2]. Iren’s portfolio now includes a 1.6‑GW site in Oklahoma, bringing its total potential capacity to 4.5 GW, of which 810 MW is operational [2]. Applying its current revenue rate of $3.4 billion from 460 MW suggests a possible $30 billion annual recurring revenue once the full capacity is online [2].

What to watch

• Convertible‑notes pricing – monitor the terms and pricing of the $2 billion offering for clues on dilution risk.
• Operational milestones – Iren’s Sweetwater 1 project, slated for April 2026 completion, will test its ability to bring gigawatts online on schedule [2].
• Nvidia warrant exercise – the $70 strike price relative to Iren’s share price will indicate whether the equity kicker adds material upside.

The Nvidia contract puts Iren squarely in the AI‑infrastructure conversation, but the company’s ability to fund and execute the massive build‑out remains the key uncertainty for investors.