Compass Point raises IREN stock price target to $50 on AI Cloud expansion

Investing.com - Compass Point has raised the price target on IREN Ltd. (NASDAQ:IREN) to $50.00 from $23.00 while maintaining a Buy rating on the stock. According to InvestingPro data, IREN has delivered an impressive 373% return over the past year, with the stock currently trading at a P/E ratio of 77.4 and a market capitalization of $11.39 billion.

The price target increase follows IREN’s September 22 procurement of 12,400 additional accelerators, including NVIDIA B300/B200 and AMD MI350X GPUs, which doubles the company’s AI Cloud fleet to approximately 23,000 GPUs. This represents a twelve-fold increase year-over-year from the 10,900 GPUs reported at the end of August.

The new GPU deliveries are being staged at Prince George, British Columbia, where IREN’s campuses can support over 60,000 Blackwell GPUs. Customers are already pre-contracting capacity ahead of commissioning, according to Compass Point’s research note.

IREN is targeting over $500 million in AI Cloud annual recurring revenue by the first quarter of 2026. Based on the current 23,000-GPU plan, this implies approximately $22,000 per GPU-year and revenue intensity exceeding $10 million per megawatt per year, compared to $2 million per megawatt for colocation services.

The company plans to energize its first 50 megawatts of direct-to-chip, liquid-cooled capacity at Horizon 1 in Childress, Texas by the fourth quarter of 2025, with Sweetwater 1 (1.4 gigawatts) scheduled for April 2026. Compass Point expects a commissioning-driven revenue ramp and rising annual recurring revenue mix. For detailed analysis and additional insights, including 16 key ProTips and comprehensive financial metrics, visit InvestingPro, where you can access the full Pro Research Report on IREN.

In other recent news, Iris Energy has made significant strides in its AI Cloud expansion, doubling its GPU capacity to 23,000 units. This expansion involved the purchase of 12,400 additional GPUs, including NVIDIA and AMD models, costing approximately $674 million. As a result, the company is targeting over $500 million in AI Cloud annualized run-rate revenue by the first quarter of 2026. Meanwhile, Roth/MKM has raised its price target for Iris Energy to $82, maintaining a Buy rating due to the company’s growth in AI Cloud services. Bernstein SocGen Group also increased its price target to $75, citing Iris Energy’s ambitious expansion into AI cloud services as a key factor. However, JPMorgan has downgraded Iris Energy from Neutral to Underweight, setting a price target of $24. This downgrade reflects concerns over valuation and the potential overestimation of Iris Energy’s data center colocation deal capabilities. These developments highlight the mixed analyst perspectives on Iris Energy’s growth and valuation.

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