The IREN stock has seen a robust bull market this year as investors respond positively to its strong earnings and its ongoing expansion into the artificial intelligence sector.
Summary
- The IREN stock price has surged as the company aims for a $500 million ARR in AI revenue by Q1.
- It also rose following the recent $17 billion agreement between Microsoft and Nebius.
- However, IREN appears to be overbought and may experience mean reversion soon.
IREN has climbed from its April low of $5.17 to $50, increasing its market capitalization to $13 billion.
As one of the leading Bitcoin (BTC) mining firms, IREN has experienced a notable increase after it reported strong results and outlined its aspirations to become a key player in AI data center operations.
The financial results indicated that its Bitcoin mining activities yielded $180 million in Q4 2025, up from $141 million in the same quarter last year. Meanwhile, its AI cloud revenue surged to $7 million, with management projecting an annualized run rate of $500 million in the current quarter.
Alongside this robust revenue growth, the company has articulated its goal of becoming a significant AI data center provider, recently announcing a doubling of its capacity to 23,000 GPUs.
IREN shares also climbed following several significant announcements that indicate a strong demand for AI computing resources.
For instance, Microsoft recently secured a $17 billion deal with Nebius, a firm offering similar services. OpenAI has a $12 billion deal with CoreWeave, and Nvidia is collaborating with OpenAI to enhance data center investment.
Consequently, investors anticipate that one or more major tech companies may consider IREN as a potential partner in a multiyear contract. Additionally, there’s speculation that it could become a target for acquisition, especially after CoreWeave’s recent acquisition of Core Scientific, a comparable company.
Potential Reasons for an IREN Share Price Decline
The primary reason that the IREN share price might decline soon is the capital-intensive nature of the data center industry. For instance, it recently invested $676 million in GPU acquisitions from Nvidia and AMD.
As a result, funds generated from its Bitcoin mining operations may not suffice to support its growth trajectory. Consequently, management might opt to capitalize on the elevated stock price to raise funds, a move that could significantly dilute existing investors’ shares.
Secondly, there are apprehensions regarding its valuation, given its current forward P/E ratio stands at 50.
Technical Analysis of IREN Indicates Possible Pullback
In terms of technical analysis, it appears that the IREN stock has reached an overbought status, with both the Relative Strength Index and the Stochastic Oscillator indicating overbought conditions. Typically, overbought assets are prone to pullbacks.
Additionally, the stock’s standard deviation has significantly increased over the past few months, remaining notably higher than the 50‑, 100‑, and 200‑day exponential moving averages.
Therefore, the stock is likely to undergo mean reversion, a phenomenon where it returns to its historical averages, often occurring as investors begin to lock in profits.
