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Investing.com - JPMorgan downgraded Iris Energy (NASDAQ:IREN) stock rating from Neutral to Underweight while raising its price target to $24.00 from $16.00 on Friday. The stock, which has surged over 400% in the past year and trades near its 52-week high of $49.39, shows signs of being overbought according to InvestingPro technical indicators.
The investment bank cited concerns that IREN’s current share price already reflects expectations for a data center colocation deal exceeding 1 gigawatt in size, which would require more than $10 billion in capital expenditure. With a current market capitalization of $12.59 billion and a P/E ratio of 77.4, InvestingPro analysis suggests the stock is trading above its Fair Value.
Iris Energy builds and operates data centers powered primarily by renewable energy for bitcoin mining and high-performance computing applications, positioning itself as a leading bitcoin mining operator with favorable power contracts and fleet efficiency. The company maintains strong financial health with a comfortable current ratio of 4.29, indicating solid liquidity to meet short-term obligations. Get deeper insights into IREN’s financial metrics and 20+ additional ProTips with an InvestingPro subscription.
The company recently launched a Cloud Services business with approximately 23,300 GPUs expected to be fully energized by the first quarter of 2026, and is developing a 1.4 gigawatt site scheduled to come online in April 2026.
JPMorgan acknowledged IREN’s ongoing expansion, including the energization of its first 75MW high-performance computing data center called Horizon 1, but concluded the current valuation creates "more downside risk in shares than upside potential."
In other recent news, Iris Energy has made significant strides in expanding its AI Cloud capabilities. The company announced the procurement of an additional 12,400 GPUs, bringing its total to approximately 23,000 units. This expansion, which cost around $674 million, includes purchases of NVIDIA B300s, NVIDIA B200s, and AMD MI350Xs. Iris Energy is now aiming for more than $500 million in AI Cloud annualized run-rate revenue by the first quarter of 2026. Analysts have responded positively to these developments, with Bernstein raising its price target to $75, citing the company’s ambitious AI cloud expansion. Similarly, Roth/MKM increased its price target to $82, highlighting the doubling of GPU purchases. Canaccord Genuity also raised its price target to $42, emphasizing the value of Iris Energy’s data center operations. These updates underscore Iris Energy’s strategic focus on enhancing its AI infrastructure and services.
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