Bernstein: IREN Sell-off Shows Market Disappointment Over Missing AI Deals; Bitcoin No Longer Core
Bernstein analysts say the sharp drop in Iris Energy (IREN) shares—about 18% to roughly $39.79 after its earnings release—reflects investor disappointment that the miner-turned-AI-infrastructure firm did not announce new large AI partnership deals, not a deterioration in fundamentals. Bernstein notes Iris’s strategic pivot from Bitcoin mining toward AI cloud services is now the primary investment thesis: Bitcoin mining revenue fell quarter-on-quarter, while AI cloud revenue more than doubled. Iris currently holds roughly $2.3 billion in annual recurring AI cloud contracts and forecasts this to grow to $3.4 billion by Q4 2026, equivalent to deploying about 140,000 GPUs. Bernstein retains an Outperform rating and $125 price target, viewing the sell-off as a reset of expectations rather than evidence of execution failure. Key keywords: Iris Energy, IREN, Bitcoin, AI cloud, GPU deployment, Bernstein, earnings reaction.
Neutral
The immediate market reaction—an ~18% share price drop—signals short-term negative sentiment driven by unmet expectations for announced AI partnerships. That can increase volatility in the short term for IREN stock and related miner equities. However, Bernstein’s view that fundamentals remain intact, combined with strong AI cloud revenue growth (AI ARR ~$2.3B, forecast $3.4B by Q4 2026) and retention of an Outperform rating and $125 target, suggests the sell-off is an expectations reset rather than a crisis. For crypto traders this implies limited direct impact on Bitcoin price (BTC) because Iris’s strategic shift reduces its exposure as a pure Bitcoin play; any BTC-related spillover should be mild and short-lived unless multiple large miners report deteriorating mining economics concurrently. Historically, similar transitions (miners pivoting to other revenue streams) have caused company-level volatility without broad market contagion. Short-term: higher volatility for IREN and mining stocks, possible trading opportunities on mean reversion or event-driven positions. Long-term: if Iris successfully scales AI cloud contracts as projected (deploying ~140k GPUs), its correlation with BTC fundamentals will weaken, reducing crypto-market implications and repositioning IREN as a tech/infrastructure growth play rather than a pure crypto asset proxy.