IREN’s $9.7B Microsoft Deal Could Fuel a New AI Cloud Giant, Says Cantor Fitzgerald
Shares of IREN, the bitcoin mining firm that has rapidly evolved into an AI infrastructure powerhouse, have surged more than 500% year-to-date.
IREN share price performance YTD (Source: Google Finance)
Yet, according to Wall Street analyst Brett Knoblach of Cantor Fitzgerald, the stock’s remarkable run may only be in its early stages.
Following IREN’s third-quarter earnings report and the announcement of its $9.7 billion, five-year agreement with Microsoft, Knoblach reaffirmed his bullish stance on the company’s long-term prospects.
He suggested that IREN could climb to $384 by 2028 — a significant leap from its current trading price of about $67.
Microsoft Partnership Positions IREN Among “Neocloud” Giants
The turning point for the company came with its landmark partnership with Microsoft, under which the company will deliver 200 megawatts of AI compute capacity at its Childress, Texas site. The deal, valued at $9.7 billion over five years, effectively transforms IREN from a traditional bitcoin mining firm into a major player in AI-focused cloud infrastructure.
In a research note released Friday, Knoblach described IREN’s entrance into the “neocloud” sector — large-scale data infrastructure providers that power artificial intelligence workloads — as a pivotal step forward.
The analyst said the agreement places the company in the same conversation as established hyperscalers, adding credibility to its plans to scale revenue to $18.6 billion annually across its Texas and Canadian facilities.
The Microsoft contract has also dramatically reshaped the company’s outlook. Following the announcement, the company’s 2026 annual recurring revenue (ARR) guidance jumped from $500 million to $3.4 billion, signaling a new era of growth.
A Shift From Colocation to Cloud
Knoblach highlighted the firm’s strategic preference for cloud operations over colocation — a model in which clients rent space and equipment in data centers. According to IREN’s management, the cloud approach offers stronger returns, upfront capital support from partners like Microsoft, and greater long-term asset value.
Even in a worst-case scenario where the GPUs deployed today lose their relevance after five years, Knoblach noted that IREN’s infrastructure could still generate hundreds of millions in annual revenue through colocation contracts.
The analyst emphasized that Microsoft’s involvement provides both financial and reputational backing, effectively de-risking IREN’s expansion into high-performance computing.
Future-Proof Infrastructure for AI Growth
One of the more compelling aspects of IREN’s transformation is the company’s focus on designing its infrastructure for the future. Knoblach said the architecture being developed is “future-proofed” for next-generation GPUs, including NVIDIA’s upcoming Rubin chips or their successors.
By investing in power-dense, scalable facilities, IREN is positioning itself to adapt as the AI hardware landscape evolves. This flexibility, coupled with Microsoft’s long-term commitment, could make IREN a cornerstone in the growing demand for artificial intelligence compute capacity.
Long-Term Outlook: From Crypto Miner to AI Leader
While Knoblach trimmed his short-term price target slightly — reducing it from $142 to $136 — due to weaker bitcoin mining revenues, he maintained an “overweight” rating on the stock and called the company one of his top picks.
The analyst’s optimism reflects a belief that IREN’s growth potential in AI infrastructure far outweighs short-term fluctuations in mining performance. The company’s pivot away from pure cryptocurrency mining toward diversified AI and cloud services appears to be resonating with both investors and institutional partners.
Knoblach’s long-term projection of $384 per share by 2028 underscores a broader narrative taking shape across the technology and crypto sectors: that mining firms with strong energy access and operational expertise are uniquely positioned to capitalize on the AI boom.
