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Investing.com - Canaccord Genuity raised its price target on Iris Energy (NASDAQ:IREN) stock to $70.00 from $42.00 on Monday, while maintaining a Buy rating.
The significant price target increase reflects a new valuation that incorporates Iris Energy’s recently signed deal with Microsoft for GPU services at the company’s Horizons 1-4 data centers.
Canaccord’s analysis assigns approximately $22 per share in value to the Microsoft GPU project based on a discounted cash flow model using an 8% weighted average cost of capital, which the firm considers conservative given Microsoft’s potential backing for debt financing.
The firm also increased its valuation of Iris Energy’s Sweetwater 1 site from approximately $24 per share to $32 per share, citing upward valuations of sector peers, while noting this still represents a discount compared to data centers with signed co-location deals.
The total price target increase of $28 consists of $22 attributed to the Microsoft cloud services agreement and $6 from the higher valuation of the Sweetwater facility.
In other recent news, Iris Energy reported a significant rise in revenue for its fiscal first quarter of 2026, reaching $240.3 million, up from $187.3 million in the previous quarter. The bulk of this revenue, $232.9 million, was attributed to Bitcoin mining, while AI cloud services contributed $7.3 million. Following these results, Compass Point raised its price target for Iris Energy from $50 to $105, maintaining a Buy rating on the stock. Despite the positive revenue figures, the company faced challenges in the first quarter of fiscal 2025, with its stock dropping by 12.37% in aftermarket trading due to increased operating expenses and the absence of an explicit earnings beat. These recent developments reflect the company’s strategic advancements in AI cloud services. Investors continue to monitor the impact of operating expenses on the company’s financial performance.
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