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Investing.com - H.C. Wainwright raised its price target on IREN Ltd. (NASDAQ:IREN) to $56.00 from $45.00 on Monday while maintaining a Sell rating on the stock. IREN currently trades at $62.38, significantly above the new target and InvestingPro’s Fair Value assessment, which suggests the stock is overvalued despite its 467% return over the past year.
The firm’s revised target follows IREN’s fiscal first quarter 2026 results released on November 6, which H.C. Wainwright described as "underwhelming." Despite the disappointing earnings, IREN raised its AI Cloud revenue guidance for calendar year 2026. The company has shown remarkable revenue growth of 229% in the last twelve months, with a gross profit margin of 66.25%.
IREN recently announced a $9.7 billion AI Cloud deal with Microsoft, which H.C. Wainwright acknowledged as "transformational" for the company. The stock is trading approximately 5% below its level when the firm downgraded it to Sell last week. InvestingPro data shows IREN has taken a significant hit over the last week (-7.93%), though it maintains a staggering 786% return over the past six months.
H.C. Wainwright expressed concerns about execution and financing risks, noting IREN will need to deliver 460 MW of data center infrastructure and deploy over 138,000 additional GPUs within the next year. The company is now guiding to $3.4 billion in annual run-rate revenues for its AI Cloud business by the end of 2026, up from its previous target of approximately $2.5 billion.
The research firm estimates IREN will need to raise over $8 billion in the next twelve months to fund its growth targets, creating potential financing and dilution risks for investors, even when accounting for $1.8 billion in cash and $1.94 billion in Microsoft prepayments.
In other recent news, Iris Energy has reported its fiscal first-quarter 2026 results, showcasing a notable revenue increase to $240.3 million, up from $187.3 million in the previous quarter. The revenue was primarily driven by Bitcoin mining, which contributed $232.9 million, while AI cloud services generated $7.3 million. Meanwhile, Canaccord Genuity has raised its price target for Iris Energy to $70, maintaining a Buy rating. This adjustment reflects the company’s new agreement with Microsoft for GPU services at its Horizons 1-4 data centers. Compass Point also increased its price target for Iris Energy significantly, setting it at $105 from a previous $50, following the positive earnings report. Despite these advancements, Iris Energy faced a 12.37% drop in its stock during aftermarket trading due to investor concerns over rising operating expenses and the absence of an explicit earnings beat. These recent developments indicate a mixed response from the market, with analysts showing optimism while investors express caution.
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