Bernstein says IREN selloff reflects missing AI deal, not earnings, with bitcoin no longer central to investment case
Bernstein attributes IREN's stock drop to the lack of a new AI deal, not poor earnings, as AI becomes the focus.Summary
Bernstein analysts suggest that the sharp selloff in IREN shares following its latest earnings report was driven by the market's disappointment over the absence of a new major AI deal, rather than fundamental issues related to its earnings, which missed revenue expectations due to lower bitcoin mining output.
According to Bernstein, bitcoin earnings are now largely irrelevant to IREN's investment case, which is centered on its AI diversification. Investors were primarily seeking confirmation of another large hyperscaler agreement following its existing contract with Microsoft. Although AI cloud revenue more than doubled sequentially, the lack of a new customer announcement was the "real market disappointment."
Despite the stock drop, Bernstein maintained an "outperform" rating and a $125 price target, viewing the decline as an expectation reset. They highlighted IREN's strong contracted AI cloud revenue outlook of $3.4 billion by late 2026 and its well-financed balance sheet, noting that the key near-term variable for the stock is the timing of the next large AI contract.
(Source：The Block)