1 Year Into the Microsoft Deal, IREN Is Delivering and a Rally May Follow Soon

1 Year Into the Microsoft Deal, IREN Is Delivering and a Rally May Follow Soon

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Just over a year ago, investors largely viewed IREN (IREN) as a bitcoin mining company. Today, the company supplies AI infrastructure to Microsoft (MSFT) and signs billion-dollar contracts with some of the biggest names in the AI market, including Nvidia (NVDA) and Dell Technologies (DELL). These developments provide evidence that IREN's shift toward AI infrastructure is translating into actual business activity, and the market has responded strongly to that progress. IREN shares have been rewarded with two strong moves over the last two months.

The Microsoft Deal That Changed Everything

IREN's AI transformation centers on a major five-year agreement with Microsoft. The company entered into a $9.7 billion cloud services agreement with Microsoft, with 20% of the contract value paid upfront. Once fully commissioned, the deal is expected to generate nearly $1.94 billion in annualized run-rate revenue. That gives IREN a significant source of contracted business as it builds out its AI cloud operations.

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The key point is that the agreement is already translating into real infrastructure. The company has completed and delivered the first of four planned "Horizon" AI cloud deployments for Microsoft. The deployment is a 50-megawatt liquid-cooled installation at IREN's Childress, Texas campus. Nvidia has also granted IREN Exemplar Cloud status after testing the deployment's GB300 NVL72 setup. That validation is important because it shows Nvidia has tested IREN's infrastructure and confirmed its ability to support demanding AI workloads.

IREN's planned capacity expansion shows just how quickly its business is changing, growing from roughly 3 megawatts of AI cloud capacity a year ago to 480 megawatts being delivered in 2026. The neocloud is targeting 1.2 gigawatts by 2027, which would amount to more than a hundredfold growth in capacity over about two years. Importantly, the expansion is already backed by a committed timeline.

At the same time, the company is building a revenue base that goes well beyond Microsoft. After securing $2.8 billion in new contracts, IREN raised its year-end 2026 annualized revenue target to more than $4 billion. Around 85% of that revenue target is already covered by signed contracts. The customer list has also expanded to include Together AI, Nvidia, Figure AI, Perplexity, and Fluidstack.

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