Can IREN's GPU Expansion Drive $3.7B AI Cloud ARR by 2026?

IREN Limited IREN recently announced plans to expand the capacity of its AI cloud infrastructure, where the company has agreed to purchase more than 50,000 NVIDIA B300 graphics processing units (GPUs). After this purchase, the company’s total GPU fleet is expected to reach 150,000 GPUs. IREN expects this capacity to support more than $3.7 billion in AI cloud annualized run-rate revenues (ARR) by the end of fiscal 2026.

The additional GPUs will be deployed in phases during the second half of fiscal 2026. They will be installed in IREN’s existing air-cooled data centers in Mackenzie, British Columbia and Childress, Texas. Since these facilities already have power and infrastructure in place, IREN can add GPUs without building new data centers. 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. This shows that the company already has a strong base to start from.

IREN has also raised significant capital to support expansion of its AI cloud capacity. Over the past eight months, IREN raised about $9.3 billion through customer prepayments, convertible notes, GPU leasing and GPU financing. IREN has secured $3.6 billion in GPU financing from Goldman Sachs and JPMorgan during the second quarter and plans to raise around $3.5 billion in additional capital spending for the new GPU orders in the second half of 2026 to fund its AI cloud infrastructure expansion.

Overall, the above-mentioned factors should support the company's plans to reach the $3.7 billion AI Cloud ARR target by the end of fiscal 2026. The Zacks Consensus Estimate for IREN's fiscal 2026 revenues is pegged at $984.53 billion, suggesting a year-over-year increase of 93.3%. The Zacks Consensus Estimate for IREN's fiscal 2027 revenues is pegged at $2.70 billion, indicating a year-over-year increase of 173.9%.

IREN Stock Faces Stiff Competition

IREN faces intense competition from Applied Digital APLD and TeraWulf WULF in the AI infrastructure space.

In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 megawatts (MW) of total utility power in its initial phase. This can support up to 300 MW of critical IT load. The goal is to turn available power into usable, high-density AI capacity for large customers.

In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add about 1.5 GW of power capacity to the company’s portfolio. With these additions, TeraWulf’s total platform size increases to about 2.8 GW across five sites. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.

IREN’s Price Performance, Valuation & Estimates

Shares of IREN have surged 64% in the past six months, outperforming the Zacks Financial Miscellaneous Services industry’s decline of 26.8%.

IREN 6-Month Price Performance

IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 6.80X compared with the industry’s 2.70X.

IREN Forward 12 Months (P/S) Valuation

The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 38 cents per share, down by 43.3% over the past 30 days, but marking a substantial year-over-year increase.

Currently, IREN carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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