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IREN Limited shares drop significantly as the company reports a nine-figure impairment charge and a shift toward AI cloud services.

IREN Limited shares fell sharply on Friday, with the stock dropping over 13% as investors reacted to a fiscal 2026 impairment charge of $638.8 million. The writedown, primarily tied to older mining equipment, signaled a transition for the company as it pivots from Bitcoin mining to AI compute. While Bitcoin-mining revenue plunged 63%, AI Cloud Services revenue surged 907% year-over-year, reaching $70.5 million. Despite the headline loss of $702.6 million for the fiscal year, the company reported total revenue of $707 million, exceeding analyst expectations. Analysts from Citizens JMP and H.C. Wainwright remain bullish, citing the $4 billion of contracted annualized recurring revenue as evidence of a successful transition. The selloff also triggered sympathy selling across the AI data center sector, affecting peers like Applied Digital and TeraWulf. Investors are now focused on how quickly IREN Limited can convert its contracted revenue into reported earnings while managing the capital-intensive costs of new infrastructure.

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