Iris Energy Boasts 'Largest Untapped Power' Portfolios For Bitcoin Mining, Profitable AI Cloud Tech: Analyst

Earlier this month, Iris Energy Ltd IREN announced the purchase of 1,080 of Nvidia Corp's NVDA H200 GPUs for $43.9 million.

The company represents "an attractive investment opportunity in the growing energy demand for digital infrastructure," according to Roth Capital Partners.

Analyst Darren Aftahi initiated coverage of Iris Energy with a Buy rating and price target of $14.

The Iris Energy Thesis: The company has among the "largest untapped power portfolios operating multi-purpose data centers," which are mainly for mining Bitcoin and a "small but fast-growing, highly profitable AI Cloud business," Aftahi said in the initiation note.

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While more than 98% of Iris Energy's capacity serves Bitcoin mining, its AI Cloud segment reached an ARR (annual recurring revenues) of around $15 million in August, with around 98% hardware margins, he added.

"Its recent AI Cloud expansion should more than double its ARR figure (by YE CY24), driving 10% of profits going forward," the analyst wrote. "However, we believe the real opportunity and value lies in its power assets and converting them into highly visible/high-margin HPC opportunities," he further stated.

IREN Price Action: Shares of Iris Energy had risen by 1.24% to $7.83 at the time of publication on Wednesday.

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