IREN Limited (NASDAQ:IREN) shares are trading on volatility Friday after the company reported worse-than-expected second-quarter financial results on Thursday after the market closed.
Quarterly Results And AI Cloud Progress
IREN posted a loss of 52 cents per share, missing the consensus estimate of a 14 cent loss. In addition, the company reported revenue of $184.69 million, missing the consensus estimate of $228.13 million.
IREN said results were impacted by significant non-cash and non-recurring items. These included $219.2 million in unrealized losses tied to prepaid forwards and capped calls associated with convertible notes, along with a one-time debt conversion inducement expense. The company also recorded $31.8 million in mining hardware impairments related to its ongoing transition from ASIC-based Bitcoin mining to GPU-based AI infrastructure.
Stock-based compensation totaled $58.2 million during the quarter, including $22.3 million of accelerated amortization tied to performance-based awards. These costs were partially offset by an income tax benefit of $182.5 million related to the release of deferred tax liabilities.
Despite the earnings miss, IREN highlighted progress in its shift toward AI cloud infrastructure. The company said it secured $3.6 billion in GPU financing for a Microsoft contract, bringing coverage of GPU-related capital expenditures to approximately 95% when combined with customer prepayments. IREN also reiterated its target to expand to 140,000 GPUs, aiming to deliver $3.4 billion in annual recurring revenue by the end of calendar year 2026.
Technical Analysis Of IREN
IREN is currently trading 28% below its 20-day simple moving average (SMA) and 24.5% below its 100-day SMA, which highlights a bearish trend in the short to medium term. Over the past 12 months, shares have surged by 243.31%, but they are currently positioned closer to their 52-week lows than their highs, indicating a potential reversal or consolidation phase.
The RSI is at 38.31, suggesting neutral territory, while the MACD is below its signal line, indicating bearish pressure on the stock. This combination points to mixed momentum, as the stock is not in oversold territory but lacks bullish indicators to suggest a reversal.
- Key Resistance: $43.50
- Key Support: $37.00
The technical setup indicates that IREN is facing challenges in maintaining upward momentum, with key support at $37.00 being crucial for bulls to defend. If the stock breaks below this level, it could signal further weakness ahead.
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for IREN Limited Ordinary Shares, highlighting its strengths and weaknesses compared to the broader market:
- Value: Weak (Score: 39.05) — Trading at a steep premium relative to peers.
- Momentum: Bullish (Score: 98.68) — Stock is outperforming the broader market.
The Verdict: IREN Limited Ordinary Shares’s Benzinga Edge signal reveals a strong momentum score, indicating that while the stock is currently facing challenges, it has the potential for recovery. However, the weak value score suggests caution as it trades at a premium compared to its peers.
IREN Shares Fall Lower
IREN Price Action: At the time of writing, IREN shares are trading 1.28% lower at $39.23, according to data from Benzinga Pro.
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