Bulls Lift Targets After MSFT Deal

Wall Street continues to try to stay ahead of IREN ( IREN ) following yesterday’s $9.7 billion deal with Microsoft ( MSFT ) to provide 200 megawatts (MW) of AI data center capacity.

The company’s biggest sales fan is Cantor Fitzgerald’s Brett Knoblauch. Bullish on the stock last summer when it was trading for $10 and continues to walk its price target since then, Knoblauch yesterday rose again, this time to $142 from $100. This implies more than a 100% upside from yesterday’s close of $67.75.

Bernstein’s Gautam Chhugani, meanwhile, said the deal with MSFT cements IREN’s position as one of the few infrastructure players that owns its own power assets. He raised his IREN price target to $125 from $75 and reiterated his outperform rating.

The deal could generate $2 billion in annual recurring cloud AI revenue for IREN by 2027, on top of about $500 million from existing operations, Chhugani said.

Unlike competitors such as CoreWeave (CRWV) and Nebius (NBIS), IREN’s 2.9 gigawatt (GW) portfolio allows it to expand in line with demand without relying on co-location partners, a structure that will increase profitability, Chhugani continued.

Chhugani now forecasts $2.5 billion in cloud AI revenue by 2027, up from $1.1 billion previously, and values ​​IREN’s Sweetwater site at $5 million per megawatt, based on recent M&A multiples.

Additionally, the Microsoft deal only leverages about 10% of IREN’s total power capacity in British Columbia and Texas, leaving the scope for further scaling with Microsoft or other hyperscalers.

Roth Capital also raised its price target to $94 from $82.

Shares are down nearly 5% early Tuesday amid a general slump in markets, with Nasdaq futures down 1.5% and bitcoin threatening to fall below the $100,000 level.

Read more: IREN rises 30% after signing $9.7 billion AI cloud deal with tech giant Microsoft