IREN vs. MSTR: Which Bitcoin-Focused Stock is a Buy Right Now?

IREN Limited IREN and Strategy MSTR are two well-known bitcoin-focused stocks. While Strategy is the world’s largest bitcoin treasury company, holding 713,502 bitcoins as of Feb. 1, 2026, IREN Limited offers infrastructure to mine Bitcoins.

Bitcoin, the most popular cryptocurrency, peaked in value at the beginning of October 2025, and since then, it has been nosediving. The question remains: amid the price volatility, which bitcoin mining stock has more upside potential? Let us break down their fundamentals, growth prospects, market challenges, future strategy and valuation to determine which offers a more compelling investment case.

The Case for IREN Stock

IREN’s focus on no longer being a pure-play crypto-mining company while evolving into an AI Cloud Service Provider seems to bode well for the company’s prospects. IREN is aiming to reach $3.4 billion in annualized run-rate revenues (ARR) by the end of 2026, mainly from its AI cloud business. In the second quarter of fiscal 2026, IREN reported around $2.3 billion of ARR under contract, which includes its large AI cloud agreement with Microsoft and about $0.4-$0.5 billion of ARR from the Prince George site.

In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract. Management said this reduces risk and allows the company to focus on adding more customers.

Another positive is power availability. In the second quarter of fiscal 2026, IREN stated that it has more than 4.5 gigawatts (GW) of secured power, which management said is hard to find in the current data center market and reaching its $3.4 billion ARR target by the end of 2026 would use only about 10% of this power. This means most of the power capacity is still available for future growth, which should support the company’s plans to deploy around 140,000 GPUs by the end of 2026.

IREN is seeing short-term pressure on revenues as it moves away from Bitcoin mining and focuses more on AI cloud services. In the second quarter of fiscal 2026, total revenues fell 23% from the previous quarter. Management said this drop was mainly due to lower Bitcoin mining revenues.

IREN is shifting power and infrastructure away from mining and toward AI workloads. AI cloud revenues are increasing, but it is not yet large enough to fully make up for the drop in mining revenues. Management said this pressure should be temporary. As more GPUs are installed and AI cloud contracts ramp up, AI revenues are expected to become the main source of revenue. Until then, quarter-over-quarter results may remain uneven.

The Case for Strategy Stock

Strategy benefits from increasing bitcoin yield, which remains the company’s main growth. In 2025, Strategy’s Bitcoin yield hit 22.8%, translating to a bitcoin gain of $8.9 billion in dollar terms. Strategy added 101,873 Bitcoin in 2025 and ended the year with 713,502 Bitcoin on its balance sheet.

Bitcoin yield is supported by large capital raises. During 2025, Strategy raised more than $25 billion through common equity and preferred equity offerings. Management stated that most of this capital was used to buy Bitcoin, directly increasing Bitcoin holdings and supporting Bitcoin per share growth. The goal is to increase Bitcoin per share over time, even during weak Bitcoin markets.

The company continued to buy Bitcoin during price declines. In the fourth quarter, Strategy purchased 32,470 Bitcoin for about $3.1 billion, despite a drop in Bitcoin prices. Management said Bitcoin purchases are made regularly and are not timed to the market. The goal is to increase Bitcoin per share over time, even during weak Bitcoin markets.

Leverage remains controlled. Net leverage stood at around 10-13% at the end of 2025. Management said this level is lower than that of many large public companies. Strategy built a $2.25 billion cash reserve, which covers more than 2.5 years of interest and dividend payments. This reduces the risk of selling Bitcoin during market downturns.

Overall, the above-mentioned points show that Bitcoin yield remains Strategy’s main growth engine. Strategy has the capital access, liquidity and balance sheet structure to support Bitcoin per share growth, which bodes well for the company's prospects in the upcoming quarters.

IREN vs. MSTR: Earnings Estimate Trend

The earnings estimate revision trend for the two companies reflects that analysts are turning more bullish toward Strategy.

The Zacks Consensus Estimate for IREN’s fiscal 2026 bottom line is pegged at an earnings per share (EPS) of 38 cents, revised downward from EPS of 58 cents per share projected seven days ago.

The Zacks Consensus Estimate for Strategy’s 2026 bottom line is pegged at an EPS of $98.83, revised upward from an EPS of $98.29 projected seven days ago.

IREN vs. MSTR: Price Performance and Valuation

Over the past three months, IREN shares have plunged 13.6%, while Strategy shares have lost 35.3%.

3-Month Price Return Performance

Currently, Strategy is trading at a trailing 12-month price/book (P/B) multiple of 0.87X, lower than IREN’s trailing 12-month P/B multiple of 5.59X. Strategy’s reasonable valuation makes it more attractive for investors looking for value and stability.

IREN vs. MSTR: 12-Month TTM P/B Ratio

Conclusion: Buy MSTR Stock, Sell IREN Right Now

Both IREN and Strategy offer exposure to Bitcoin, but their current risk and return profiles are very different. IREN has a long-term story around AI cloud services, strong power availability and large contracted ARR. However, the shift away from Bitcoin mining is creating short-term revenue pressure, and earnings estimates are moving down. While the AI pivot could pay off over time, near-term results may remain uneven.

In contrast, Strategy’s growth is driven by rising Bitcoin holdings, strong capital access, controlled leverage and improving earnings estimates. Strategy’s reasonable valuation offers downside protection as well, making it a better choice for investors looking for stability and steady upside.

Currently, Strategy sports a Zacks Rank #1 (Strong Buy), making it a clear winner over IREN, which has a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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