Gregory Miller reiterates Buy rating for IREN Limited as AI cloud business gains momentum over Bitcoin mining.
Gregory Miller of Citizens JMP reiterated a Buy rating and $80 price target for IREN Limited, viewing the recent share price drop as a buying opportunity. While the company's fourth-quarter revenue fell 27% year over year to $137.23 million, it still exceeded Wall Street estimates. The primary driver of the company's shift is the rapid growth of its AI cloud services, which saw a 907% revenue increase compared to the previous year. Conversely, Bitcoin-mining revenue plunged 63% during the same period. Analysts suggest the investment case for IREN Limited now depends more on AI execution than on Bitcoin prices. The company currently has $1 billion of annual recurring revenue operating and $4 billion of contracted annual recurring revenue. Investors are advised to monitor how quickly the revenue is converted and how much capital is required to be deployed. Faster conversion of these contracts into reported revenue could help mitigate the current earnings volatility.