Important points
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IREN’s core theory remains intact and continues to be further developed as tech giants grapple with increasing AI spending.
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The company’s AI data center has become a significant bottleneck for the AI industry.
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IREN is scheduled to report earnings on February 5th, and investors are rushing into the stock ahead of the quarterly results release.
Airen(Nasdaq:Iren) It is one of the most unstable Artificial Intelligence (AI) Stocks This year. The stock has seen multiple price movements of more than 10% in both directions over the past few days as its earnings date approaches.
The AI data center provider will report earnings on February 5th, and some investors are speculating that the company will announce another lucrative deal with a hyperscaler. But not all investors are waiting for earnings announcements. Investor enthusiasm has increased, with the stock already up more than 20% since the beginning of the year.
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The demand for gigawatts is huge
Iren’s potential customers include: major technology companies Fueling our AI ambitions will require gigawatts of power. meta platform(NASDAQ:Meta) says in its metacomputing plan that it aims to deploy hundreds of gigawatts of AI power over the next few decades. microsoft(NASDAQ: MSFT) has a similar vision, touting AI as the next industrial revolution.
Iren is one of the few companies that offers AI data centers and enough gigawatts of power. The company has a 3-gigawatt pipeline and its Sweetwater 1 project is scheduled to come online in April. The project has an output of 1.4 gigawatts, which is a significant lead over other AI data center providers.
Iren data centers are different from traditional data centers. While traditional data centers handle a variety of tasks such as web hosting and data storage, AI data centers are specifically designed to handle AI workloads.
Ilen’s deal with Microsoft proves his credibility
While investors are speculating that Iren will announce another big deal in February, the company has already proven itself in the industry. The $9.7 billion, five-year deal with Microsoft included a 20% upfront payment to fund capital expenditures.
The contract covers 200 megawatts, a fraction of Airen’s 3 gigawatts. As more of Iren’s energy goes online, deals should spread. Iren told investors in its fiscal 2026 first-quarter earnings call that it is targeting $3.4 billion in annual recurring revenue by the end of 2026.
As competition in the AI industry intensifies, high tech companies They may be more interested in working with Ayren to secure additional energy. If demand continues to heat up, Iren could raise prices.
Tech giants are increasing spending on AI
At the heart of Eilen’s investment thesis is that big tech companies are eagerly investing in AI. This part of the paper remained in place after Meta Platforms and Microsoft reported their earnings. Facebook parent company ramps up AI Capital investment Capital spending in 2026 is expected to be higher than expected, with a 73% year-on-year increase in the fourth quarter. Microsoft also spent more than expected, with capital expenditures up 66% year-over-year in the second quarter of fiscal 2026.
Increased spending on AI bodes well for Iren and other major players looking to solve various parts of the AI bottleneck. Despite Aylen’s volatility, its core thesis holds up as the company’s earnings date approaches.
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mark guberti I have a position in Airen. The Motley Fool has a position in and recommends Meta Platform and Microsoft. The Motley Fool has Disclosure policy.