### Microsoft’s $9.7 Billion AI Deal Boosts IREN to $125 Price Target

• Bernstein raises IREN's price target from $75 to $125 after a monumental AI infrastructure agreement.
• The deal underscores IREN's strategic shift to a vertically integrated AI cloud operator with robust growth projections.

On November 4, 2025, The Block reported that Bernstein increased its price target for IREN to $125, up from $75, following the company’s landmark $9.7 billion AI infrastructure agreement with Microsoft. This partnership reflects a significant transition for IREN, evolving from bitcoin mining into a vertically integrated AI cloud operator poised for expansive growth.

Under the five-year deal, IREN will supply 200 MW of GPU-based data center capacity from its Childress, Texas facility. Bernstein’s analysis projects this collaboration to generate $2 billion in annual recurring revenue by the close of 2027. Microsoft is also set to provide a 20% prepayment totaling approximately $1.94 billion, which will support IREN’s planned $8.8 billion investment in GPUs and data center construction.

The company intends to allocate $5.8 billion of the capital toward GPUs acquired from Dell Technologies, with the remaining $3 billion earmarked for constructing advanced data centers. Bernstein emphasized that IREN plans to adopt a funding strategy combining convertibles and debt to cover additional expenditures, ensuring scalability in its AI service offerings.

Leveraging its ownership of 2.9 GW of power infrastructure across Texas and British Columbia, IREN is positioned to capitalize on scalability and efficiency advantages. Bernstein identified this vertical integration as a key factor in IREN achieving higher margins, contrasting with competitors dependent on third-party colocation facilities. IREN’s AI cloud segment is projected to generate $2.5 billion in revenue by late 2027, potentially contributing $28.5 billion to the company’s enterprise valuation, which is forecasted to reach $41 billion.

While bitcoin mining remains a part of its portfolio, contributing $620 million in annual EBITDA, IREN’s focus is firmly on AI-driven growth. Internal cash flow from mining operations continues to support this strategic evolution. Notably, the Microsoft agreement is expected to utilize just 10% of IREN’s existing power infrastructure, leaving significant capacity for future deals with other major industry players.

The agreement catalyzed a surge in IREN’s stock, which jumped 30% in pre-market trading. The stock closed up 11.5% at $67.75 on Monday and traded at $63.70 by Tuesday morning. Year-to-date, IREN shares have risen over 550%, reflecting strong investor enthusiasm for its pivot to AI and the promising trajectory of its business model.