Why IREN Stock Soared Over 20% This Week

• IREN received two analyst upgrades this week.

• The stock soared last year due to a huge deal with Microsoft.

• The stock trades at a considerable premium to its AI cloud computing revenue.

• 10 stocks we like better than Iren ›

Actions of IREN (Highlight: Iren) soared more than 20% this week, according to data from S&P Global Market Intelligence. A cryptocurrency miner transitioning to operating cloud data centers for artificial intelligence (AI) has received two analyst upgrades and been popular among retail traders. He also has a long-term contract with Microsoft worth billions of dollars.

As of this writing at 11:27 a.m. on Friday, January 16, IREN stock is up 21.6% this week. Here’s why and whether the stock is a buy right now.

On Monday, Bernstein named IREN one of the best AI stocks for 2026. On Tuesday, HC Wainwright upgraded the stock to a buy due to its successful pivot from Bitcoin mining to an AI cloud provider. These two analyst upgrades were the catalyst that got IREN’s stock price off the ground this week.

The company is a Bitcoin miner but is in the process of evolving its data centers to become an AI cloud provider. He signed a massive $9.7 billion deal with Microsoft earlier this year, which was the catalyst that sent the stock into the stratosphere, up nearly 400% in the last year alone.

However, if you look at IREN’s business today, it generates almost no revenue from AI cloud services. Last quarter, cloud AI revenue was just $7.3 million, which is a fraction of the entire cloud computing infrastructure industry. Investors are betting big on the future of IREN stock, which is becoming very popular in online investing communities on X and Reddit.

After its massive run this year, IREN stock now trades at a market cap of $16 billion. That’s a giant bonus for a company that generates less than $10 million in revenue per quarter from the segment of the future, AI cloud computing.

It has a massive contract with Microsoft, but it will take many years to develop and involve huge construction costs. It will be many years before IREN can achieve sufficient scale to generate profits from AI cloud computing, if it ever does. Priced at a considerable premium to its AI earnings, investors would be wise to avoid buying IREN stock at this time.

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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Bitcoin and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Why IREN Stock Soared More Than 20% This Week was originally published by The Motley Fool