IREN Stock Falls Near $18.30 Before Q1 Results Due Thursday

IREN stock fell toward $18.30 on Thursday ahead of fiscal first-quarter results due after the closing bell. The shares extended an 11.24% decline from the previous session as investors weighed whether delays at the company's Texas data-center campus were affecting the timing of revenue from Microsoft.

IREN closed Wednesday at $21.71, down $2.75, or 11.24%. By late Thursday morning the shares had fallen roughly another 14% to 16%, after trading as low as about $18.03. The company will report results for the quarter ended September 30 after the close and hold its conference call at 5:00 p.m. Eastern Time.

Revenue and cost outlook

Analysts expect revenue of between $219.95 million and $229.81 million, depending on the consensus provider. Zacks puts fiscal first-quarter revenue at $219.95 million, while TipRanks has the consensus at $229.81 million. The published consensus is unusually wide. Either figure would still be a substantial sequential increase from the $137.2 million IREN reported for fiscal fourth quarter, with the low end implying growth of about 60% and the high end about 68%.

The June quarter still reflected IREN's shift away from Bitcoin mining toward artificial intelligence (AI) cloud services. Fiscal fourth-quarter AI cloud revenue was $70.5 million, while Bitcoin mining contributed $66.7 million.

Horizon 1, the first of four 50-megawatt liquid-cooled deployments for Microsoft at Childress, was accepted in August, so the September quarter should contain its first meaningful contribution. IREN said in August it had about $1 billion of operating annualized run-rate revenue (ARR) after that acceptance. It expected more than $4 billion of contracted ARR to be operating by the end of December, once Horizons 2 through 4 were delivered. The Microsoft agreement is worth approximately $9.7 billion over five years and covers four Horizon deployments totaling about 200 megawatts of critical IT capacity.

After its fiscal fourth-quarter results, IREN told investors that first-quarter cash selling, general and administrative (SG&A) expenses would rise by approximately $40 million to $50 million sequentially. Management attributed the increase to investment in sales and marketing, research and development, development teams, site operations and cloud operations ahead of expected revenue growth.

Costs were scheduled to rise immediately, while much of the additional contracted AI capacity was not expected to become operational until late in the December quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) had already fallen from $59.5 million in the March quarter to $19.2 million in June, as the company hired ahead of the cloud expansion.

Bernstein cuts its target to $55

Bernstein analyst Gautam Chhugani kept a Buy rating on IREN on Wednesday but cut his price target by 45%, from $100 to $55. TipRanks reported that he cited uncertainty around approvals for new grid connections in Texas and elevated borrowing costs for AI infrastructure companies. TipRanks' broader Wall Street consensus remained Strong Buy, with an average target of $72.78 before Thursday's decline.

The cut came as investors repriced the entire data-center development trade following the U.S. midterm elections. Texas matters especially to IREN, which has assembled gigawatt-scale power positions there and is building the Childress campus that supports its Microsoft contract.

Chhugani said existing approved power capacity could become scarcer and more valuable if future data-center permitting becomes harder. That does not remove the execution and financing risk tied to building capacity already under contract.

FinanceFeeds flagged funding questions in an October 28 preview of the November 5 results, when the stock had rebounded 7.9% to $27.44. The shares have since given back that recovery and moved substantially lower.

Microsoft delays and data-center risk

The Information reported, citing people familiar with the situation, that delays at IREN's Childress campus contributed to Microsoft spending less on data-center capacity than it had expected in its September quarter. Microsoft had earlier disclosed that capital expenditure came in at $45.2 billion because some third-party capacity expected during the quarter was delayed, but it did not identify IREN at the time.

The Information reported that IREN was one of the providers involved. A separate report on Thursday said Microsoft had tightened oversight of projects involving IREN and other neocloud providers. The precise amount of Microsoft's spending shortfall attributable to IREN has not been disclosed.

These reports raise execution concerns but do not establish that Microsoft's $9.7 billion contract with IREN has been cancelled. IREN's August guidance called for Horizon 2 to be commissioned and Horizons 3 and 4 to be delivered during the fourth quarter of calendar 2026.

Altimeter Capital CEO Brad Gerstner said on the All-In Podcast that 10 to 15 gigawatts of expected U.S. data-center capacity could fail to come online on schedule if political resistance and permitting restrictions intensify. That is Gerstner's estimate, not a confirmed reduction in planned capacity. The risk is currently being priced into companies such as IREN, CoreWeave and Applied Digital.

Investors will look for the size of the cash SG&A increase, the revenue contribution from Horizon 1, the status of Horizons 2 through 4, whether Microsoft's deployment timetable has changed and how management plans to fund the next stage of a capital-intensive expansion. At $21.71 on Wednesday, Bernstein's $55 target implied substantial upside despite the cut. With IREN trading around $18.30 on Thursday, that gap has widened further.