Microsoft’s $9.7 Billion Bet on Iris Energy’s AI Infrastructure

A landmark agreement has positioned Iris Energy (IREN) firmly on the global technology map. The company, previously operating with a lower profile, has secured a monumental five-year contract with Microsoft valued at approximately $9.7 billion for GPU-powered cloud services. This partnership represents a transformative moment for IREN, signaling its arrival as a major infrastructure player in the artificial intelligence and cloud computing sector.

Strategic Expansion and Capital Investment

To fulfill its obligations to Microsoft, Iris Energy is undertaking a significant infrastructure expansion. The core of this effort is centered on its 750-megawatt data center campus in Childress, Texas. The company plans a phased installation of highly sought-after NVIDIA GB300 GPUs, which will be supported by liquid-cooled data centers with a critical IT load of 200 megawatts. The project is scheduled for completion by 2026.

Financing this ambitious growth, the company successfully raised capital through convertible notes. Initially targeting $875 million in October 2025, strong investor demand allowed IREN to upsize the offering to a final amount of $1.0 billion. These proceeds are earmarked for expansion initiatives and general corporate purposes. In a parallel strategic move, the company has entered into a substantial equipment procurement agreement with Dell Technologies worth around $5.8 billion, securing the necessary hardware for its scaling operations. Microsoft’s commitment is further underscored by an upfront payment covering 20% of the contract value.

Should investors sell immediately? Or is it worth buying Iris Energy?

Divergent Analyst Perspectives

The blockbuster deal has elicited sharply contrasting reactions from market analysts, highlighting the debate surrounding IREN’s future trajectory. On one side, Bernstein has expressed strong optimism, raising its price target significantly from $75 to $125 and maintaining an “Outperform” rating. Their bullish outlook is predicated on the belief that the Microsoft contract alone could generate nearly $2 billion in annual revenue by 2027.

A more cautious stance comes from H.C. Wainwright. Despite increasing its price target from $36 to $45 in late October 2025, the firm downgraded IREN’s stock to a “Sell” rating. Their analysis points to concerns about the company’s current valuation and the potential execution risks associated with such a rapid and large-scale expansion. This creates a clear dichotomy of opinion on Wall Street. All eyes are now on November 6, 2025, when Iris Energy is set to release its Q1 FY26 quarterly results, an event expected to provide critical insight into the stock’s near-term direction.