Jefferies has initiated coverage on IREN with a $79 share price target, pointing to potential upside of about 30% from recent trading levels near $60.50. Shares rose 4% on Wednesday following the outlook.
The firm’s bullish stance centers on IREN’s shift from Bitcoin mining to building its own artificial intelligence cloud platform, which it expects to deliver stronger long-term returns than traditional data center leasing models.
Ai cloud strategy seen driving higher returns
Jefferies estimates that IREN’s vertically integrated approach could generate returns of around 21% over a 10- to 20-year period. That compares with roughly 13% under a standard colocation model.
The projections depend heavily on sustained demand for high-performance computing tied to AI applications. Contracts with Microsoft and Nvidia are expected to play a key role, potentially contributing up to $3.1 billion in annual recurring revenue.
Large power capacity remains mostly unused
A major part of the thesis is IREN’s energy footprint. The company controls about 6 gigawatts of global power capacity, but only around 10% is currently in use.
This unused capacity gives IREN room to scale its AI infrastructure quickly if demand continues to grow as expected.
Capital position and expansion plans
Jefferies estimates IREN has about $250 million available for new developments after accounting for infrastructure and GPU spending. However, some market analysts suggest recent financing activity could lift that figure closer to $900 million.
The company is also expanding internationally. It recently acquired Spanish AI data center developer Nostrum, gaining access to 490 megawatts of power across Europe.
In addition, IREN announced plans for an 800-megawatt data center project in South Australia aimed at serving AI demand across the Asia-Pacific region.
Execution risks remain
Despite the positive outlook, the strategy depends on IREN’s ability to execute large-scale, capital-intensive projects and maintain access to funding. The long-term success of its pivot will hinge on turning its power assets into fully operational AI infrastructure while demand for computing capacity remains strong.
Explore how AI complements blockchain to better understand IREN’s strategic pivot from Bitcoin mining to high-performance AI infrastructure.
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