IREN Stock Rebounds: Banks Boost AI-Driven Valuation Shift

Elena Rossi February 12, 2026 6 min read

IREN Stock Valuation: Re-Rating Potential Amid Revenue Pivot to AI

Iris Energy Limited (IREN), a prominent player in the Bitcoin mining sector that has increasingly pivoted toward high-performance computing for artificial intelligence applications, has experienced a notable resurgence in its stock price. This recovery comes on the heels of significant involvement from major financial institutions, signaling strong market confidence in the company’s strategic direction. After facing considerable downward pressure, IREN shares have demonstrated resilience, climbing back with renewed investor enthusiasm as prominent banks initiate coverage and assign favorable ratings.

The narrative surrounding IREN has shifted dramatically in recent sessions. What was once viewed as a pure-play cryptocurrency miner heavily reliant on volatile Bitcoin prices is now being reappraised as a multifaceted technology enterprise with substantial exposure to the burgeoning AI infrastructure market. This transformation is not merely speculative; it is underpinned by tangible developments in the company’s operational footprint, capacity expansions, and revenue diversification efforts.

Market Response to Institutional Endorsement

Major Wall Street banks have played a pivotal role in this turnaround. Leading analysts from institutions such as B. Riley Securities, Cantor Fitzgerald, and J.P. Morgan have recently launched coverage on IREN, each providing Buy or Overweight recommendations accompanied by ambitious price targets. These targets, ranging from $18 to $26 per share, imply substantial upside potential from current trading levels, reflecting a consensus view that the market has undervalued IREN’s growth trajectory.

B. Riley Securities, in particular, has been vocal in its support, reiterating a Buy rating with a $22 price target. The firm highlights IREN’s aggressive expansion of its AI cloud services, which are powered by state-of-the-art NVIDIA GPUs. This segment is expected to contribute increasingly to the company’s top line, diluting the cyclicality associated with Bitcoin mining while introducing higher-margin, recurring revenue streams.

Cantor Fitzgerald echoed this optimism, assigning an Overweight rating and a $20 target. Their analysis emphasizes IREN’s pristine balance sheet, with zero debt and ample cash reserves positioning the company ideally for capital-intensive expansions in both mining and AI high-performance computing (HPC) domains. J.P. Morgan’s initiation with an Overweight rating and $18 target further reinforces the bullish thesis, pointing to IREN’s operational efficiency and strategic site selections in regions with abundant, low-cost renewable energy sources.

Strategic Pivot from Bitcoin Mining to AI Infrastructure

At the core of IREN’s re-rating is its deliberate shift in revenue mix. Historically, the company derived nearly all its income from Bitcoin mining, a business characterized by high volatility tied to cryptocurrency price fluctuations, network difficulty adjustments, and halving events. However, IREN has methodically diversified by repurposing a portion of its vast hashrate infrastructure for AI and HPC workloads.

This transition leverages IREN’s core competitive advantages: access to gigawatt-scale power capacity backed by renewable energy, horizontally scaled data centers optimized for power-dense computing, and a management team with proven execution in large-scale deployments. The company’s facilities in British Columbia, Canada, and Texas, USA, boast power usage effectiveness (PUE) ratios among the industry’s best, making them exceptionally suitable for the energy-intensive demands of AI training and inference.

In its most recent quarterly update, IREN disclosed that AI cloud services now represent a growing slice of revenues, with bookings accelerating as hyperscale cloud providers and enterprise clients seek dedicated GPU capacity. The company has deployed thousands of NVIDIA H100 and H200 GPUs, with plans to scale to tens of thousands in the coming quarters. This positions IREN as a nimble alternative to hyperscalers like AWS, Azure, and Google Cloud, which face capacity constraints amid exploding AI demand.

Financial Health and Growth Catalysts

IREN’s financial position is a cornerstone of investor confidence. With no long-term debt and cash equivalents exceeding $400 million as of the latest reporting period, the company maintains significant dry powder for growth initiatives. This fortress balance sheet allows IREN to self-fund expansions without dilutive equity raises or costly borrowings, a rarity in the capital-hungry data center and mining sectors.

Key growth catalysts include ongoing site developments at Childress, Texas, where IREN is ramping up to 2 gigawatts of total capacity, and further optimizations at its Canadian Prince George facility. These projects are phased to align with equipment procurement cycles and grid connection approvals, minimizing execution risk while maximizing returns on invested capital.

Revenue projections for fiscal 2026 reflect this momentum. Consensus estimates pencil in topline growth exceeding 150% year-over-year, driven by a blended hashrate expansion to over 50 exahashes per second for mining alongside AI cloud utilization rates climbing toward 70%. Margins are expected to expand as AI workloads command premium pricing—often 3-5 times that of mining—while benefiting from IREN’s low power costs averaging under 3 cents per kilowatt-hour.

Valuation Metrics Supporting Re-Rating

From a valuation standpoint, IREN trades at a compelling discount to both pure-play miners and AI infrastructure peers. Its enterprise value to expected 2026 EBITDA multiple sits around 8x, well below the 12-15x commanded by high-growth data center operators like Core Scientific or Iris Energy’s direct competitors. Forward price-to-sales ratios similarly appear attractive at under 4x, given the revenue acceleration anticipated.

Analysts argue that as the market digests IREN’s dual revenue engine, multiples should expand toward those of established HPC providers. Sensitivity analyses suggest that even modest success in capturing 1-2% of the exabyte-scale AI inference market could justify share prices north of $30 within 18 months.

Current Market Cap: Approximately $1.2 billion
2026 Consensus Revenue: $850 million+
Expected EBITDA Margins: 45-55%
Upside to Analyst Targets: 80-120%

Technical Setup and Market Sentiment

Technically, IREN stock has formed a multi-month base, with recent price action breaking out above key resistance levels around $10. Volume profiles confirm institutional accumulation, with average daily volume surging 200% amid the bank initiations. Relative strength index (RSI) readings have reset from overbought extremes, suggesting room for further upside without immediate overextension risks.

Short interest has moderated to 15% of float, down from peaks above 25%, reducing headwind from potential squeezes. Options flow reveals a skew toward calls, with notable activity in March and June expirations targeting $15-$20 strikes—aligning with fundamental targets.

Risks and Considerations

Despite the bullish backdrop, investors should remain mindful of inherent risks. Bitcoin price volatility remains a factor, as mining still constitutes the majority of near-term revenues. Regulatory uncertainties around energy usage for crypto mining persist, particularly in North America. Competition in AI cloud services intensifies from entrenched players and new entrants alike.

Execution risk attaches to the ambitious capacity buildout, including potential delays in GPU procurement amid global chip shortages and grid interconnection hurdles. Macroeconomic headwinds, such as higher-for-longer interest rates, could pressure growth stocks broadly.

Conclusion: A Compelling Risk-Reward Profile

IREN’s rebound underscores a market verdict in favor of its transformation story. With marquee banks validating the bull case through fresh coverage and lofty targets, the stage is set for a sustained re-rating. For investors seeking exposure to the AI infrastructure megatrend via a leveraged, undervalued play with pristine finances, IREN presents a differentiated opportunity. As revenue mix tilts decisively toward high-margin HPC, the company’s valuation should catch up to its operational momentum, potentially delivering multibagger returns over the next 12-24 months.

This analysis draws from IREN’s latest SEC filings, earnings transcripts, and consensus data as of February 12, 2026. Investors are encouraged to conduct independent due diligence and consult financial advisors before making investment decisions.