While all the major indexes were down on Friday, IREN (IREN) stock gained 14% on the day due to an excellent Q4 2025 earnings report. The Bitcoin miner’s stock has now gained 170% in 2025 and 284% over the past 12 months. There’s no question it’s on a roll.
As a result of the significant gain on Friday, IREN stock leaped 20 spots higher in Barchart’s Top 100 Stocks to Buy, finishing the day’s trading in 16th position. It was one of only five top 100 stocks to gain 20 spots or more. While its momentum is clear, the stock appears to be ready to shift into a higher gear, delivering more gains in 2025 and into 2026.
I’ll be honest, Bitcoin miners aren't really my thing. I still consider it a fringe business, but it’s hard to argue with success. Although it generates most of its income from mining Bitcoin, its move into AI services provides bulls with hope for future growth.
Here’s why I feel this way.
The Evolving Business Model
Iren began mining Bitcoin in 2019. It went public in November 2021 at $28. Then known as Iris Energy, the Australian-based company’s fiscal 2021 (June year-end) revenue was $7.54 million. At the time, it had no other operating streams of revenue.
Fast forward to fiscal 2025. Its revenue from mining Bitcoin was $484.63 million, 70-fold higher in just four years. Of course, it helps that Bitcoin now trades at $109,236, more than three times where it traded in June 2021.
More importantly, it now has two revenue streams: Bitcoin Mining (97%) and AI Cloud Services (3%). Three percent might not seem like a lot. However, two years ago, this secondary revenue stream didn’t even exist.
In fiscal 2025, it generated over $15 million in gross profits. As it adds HPC (high-performance computing) capacity through the purchase of Nvidia (NVDA) GPUs (graphics processing units) -- it plans to add 9,000 GPUs in the coming months, bringing the total to 10,900 -- these gross profits will grow exponentially. Iren expects to hit annualized AI Cloud revenue of $200 million to $250 million by December. That’s approximately 20% of the company’s total annualized revenue of $1.25 billion.
Currently, it has AI data centers operating in Texas and British Columbia, with 810 MW (megawatts) capacity, with expansion underway at both. However, it is the Sweetwater 1 and Sweetwater 2 data centers under development near Abilene, Texas, that will see Iren add 2 GW (gigawatts) capacity, bringing its AI data center capacity to 2.9 GW, almost four times the current amount.
What This Means for Profitability
In 2025, its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $269.7 million, up from $54.4 million a year earlier. The adjusted EBITDA margin of 54% was almost double its 29% margin in 2024.
According to S&P Global Market Intelligence, Iren’s revenue is expected to grow to $1.11 billion in 2026, $1.31 billion in 2027, and $1.55 billion in 2027. Assuming a 54% adjusted EBITDA margin, in 2027, its adjusted EBITDA would be $837 million, a little more than three times its current non-GAAP profitability.
Now consider what this could mean for its valuation.
It currently has an enterprise value of $7.60 billion, or 28.2 times its 2025 adjusted EBITDA. Based on a similar multiple, its enterprise value in June 2027 would be $23.6 billion, three times its current valuation.
However, while Wall Street’s revenue estimates for the next three years likely take into account Bitcoin’s increased value, they do not account for a potential multiple expansion in the years ahead.
For example, the Wall Street estimate for 2027 EBITDA is $872.4 million, slightly higher than the $837 million I mentioned earlier. Its current enterprise value is just 8.71 times this estimate. At 17.42 times EBITDA, the valuation jumps to $15.2 billion. At 28.2 times EBITDA, the valuation jumps to $24.6 billion, $1 billion higher than my earlier estimate.
What Makes IREN Stock Intriguing?
I think the million-dollar question about IREN stock isn’t whether Bitcoin will double in price over the next three years -- I don’t have a crystal ball, so I won’t entertain a guess -- but rather how fast it can grow its AI revenues to 30%, 40%, or even 50% of its annual total.
Here’s why.
In Q4 2025, its cost of revenue for its Bitcoin mining was $52.4 million or 29.1% of the $180.3 million in Bitcoin mining revenue. At the same time, its AI Cloud Services cost of revenue in the fourth quarter was $500,000 or 7.1% of its $7 million revenue. Its total all-in cash cost in the quarter was $65.3 million, or $35,800 per Bitcoin mined (1,825). This includes $12.4 million in other net costs, which represent selling, general, and administrative expenses, as well as any other miscellaneous costs not included in the first two.
Over the next three years, if Bitcoin just holds its value, and Iren lowers its cost of mining each Bitcoin to less than the current amount of $28,712 ($52.4 million divided by 1,825 Bitcoin mined), the unit’s profitability increases.
However, if it can maintain a 7% cost of revenue for its AI Cloud Services, that’s when the profits will really start to flow.
At the end of the day, the two units are joined at the hip. It can’t do Bitcoin mining without the data centers. And, without the Bitcoin mining, it wouldn’t have had a business.
But as far as I can tell, the combination of Bitcoin mining with AI Cloud Services and HPC data centers is a natural evolution due to the large-scale power needs of both units.
They go together like salt & vinegar chips.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
