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New AI cloud contracts have Iren's revenue growth exploding.
Iren says contract pricing keeps rising.
Shares of the artificial intelligence (AI) cloud provider Iren Limited (NASDAQ: IREN) jumped nearly 20% Monday morning after a big revision to its 2026 revenue target. The announcement showed that AI infrastructure investments continue to grow, despite fears that a bubble is forming.
Iren stock eased off its early jump, but remained up by 16.7% as of 11:45 a.m. ET.
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AI developers keep spending
Tech stocks have been volatile recently as investors balance the massive spending to build out compute capacity for AI models with fears of a bubble if companies do not receive proper returns on those investments.
Iren announced today that it has continued to sign contracts to lease out its data center capacity. It says it has new long-term cloud service agreements that allow it to raise its year-end annual revenue run rate to over $4 billion. That's up from $3.7 billion and assumes its planned cloud capacity increases are completed this year.
As companies need more computing resources for AI training and inference, they are seeking contracts with companies like Iren. Its customers include tech giants such as Nvidia and Microsoft, as well as private cloud computing companies like Perplexity and Fluidstack.
The biggest reason investors jumped in today may be that the company noted that "contracted pricing continues to strengthen."
That's a good sign that companies are confident that they will see proper returns on these investments, and that demand for Iren's capacity remains strong.
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Howard Smith has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool has a disclosure policy.
