IREN stock fell toward $18.30 on Thursday ahead of fiscal first-quarter results due after the closing bell, extending an 11.24% decline from the previous session as investors added a new concern to an already difficult earnings setup: whether delays at the company’s Texas data-center campus are affecting the timing of revenue from Microsoft.
IREN closed Wednesday at $21.71, down $2.75, or 11.24%. By late Thursday morning, the shares had fallen another roughly 14% to 16%, after trading as low as about $18.03.
The company is scheduled to report results for the quarter ended September 30 after Thursday’s close and hold its conference call at 5:00 p.m. Eastern Time.
Analysts are looking for revenue somewhere between $219.95 million and $229.81 million, depending on the consensus provider. The bigger question tonight is whether IREN can show that its rapid AI-cloud buildout is converting into reported revenue quickly enough to absorb the much higher cost base management itself told investors to expect.
Bernstein Cut Its IREN Target From $100 to $55 but Kept Buy
Bernstein analyst Gautam Chhugani maintained a Buy rating on IREN on Wednesday but cut his price target by 45%, from $100 to $55.
TipRanks reported that Chhugani cited uncertainty around approvals for new grid connections in Texas as well as elevated borrowing costs for AI infrastructure companies. Its broader Wall Street consensus remained Strong Buy, with an average target of $72.78 before Thursday’s additional decline.
The target reduction came as investors repriced the entire data-center development trade following the U.S. midterm elections. Texas is particularly important to IREN because the company has assembled gigawatt-scale power positions there and is building the Childress campus supporting its Microsoft contract.
Chhugani’s argument is not entirely bearish. He said existing approved power capacity could become more scarce and therefore more valuable if future data-center permitting becomes harder. But that does not remove the execution and financing risk attached to building the capacity already under contract.
FinanceFeeds flagged those funding questions in its October 28 preview of IREN’s November 5 results, when the stock had rebounded 7.9% to $27.44. The shares have since given back that recovery and moved substantially lower.
IREN Revenue Estimates Range From $219.95 Million to $229.81 Million
The published revenue consensus is unusually wide enough to state as a range rather than pick one figure.
Zacks puts fiscal Q1 revenue at $219.95 million, while TipRanks has the consensus at $229.81 million. That would still represent a substantial sequential increase from the $137.2 million IREN reported in fiscal Q4.
At the low end of the range, revenue would rise about 60% sequentially. At the high end, it would increase about 68%.
The comparison matters because the June quarter still reflected IREN’s transition away from Bitcoin mining and toward AI cloud services. Fiscal Q4 AI cloud revenue was $70.5 million, while Bitcoin mining contributed $66.7 million.
Horizon 1, the first of four 50-megawatt liquid-cooled deployments for Microsoft at Childress, was accepted in August, meaning the September quarter should contain the first meaningful contribution from that deployment.
IREN said in August that it had about $1 billion of operating annualized run-rate revenue following Horizon 1 acceptance and expected more than $4 billion of contracted ARR to be operating by the end of December once Horizons 2 through 4 were delivered.
FinanceFeeds previously examined the scale of that contract when IREN shares reacted to reports of another potential frontier-AI customer. The Microsoft agreement alone is worth approximately $9.7 billion over five years and covers four Horizon deployments totaling about 200 MW of critical IT capacity.
The Cost Step-Up Is Already Known
Investors do not have to wait for Thursday’s release to know that operating spending was expected to increase sharply.
IREN told investors after its fiscal Q4 results that first-quarter cash selling, general and administrative expenses would rise by approximately $40 million to $50 million sequentially.
Management attributed that increase to investment across sales and marketing, research and development, development teams, site operations and cloud operations ahead of expected revenue growth.
The timing creates the central accounting test for the quarter. Costs were scheduled to rise immediately, while much of the additional contracted AI capacity was not expected to become operational until late in the December quarter.
IREN’s adjusted EBITDA had already fallen from $59.5 million in the March quarter to $19.2 million in June as the company hired ahead of the cloud expansion.
The financing side has also become more expensive across the sector. FinanceFeeds examined that pressure in October when IREN stock fell 6.3% as investors repriced borrowing costs for data-center developers.
Microsoft Delays Give Tonight’s Call a New Question
Thursday’s selloff adds an issue that was not part of the original earnings setup.
The Information reported, citing people familiar with the situation, that delays at IREN’s Childress campus contributed to Microsoft spending less on data-center capacity than it had expected during its September quarter.
Microsoft had previously disclosed that capital expenditure came in at $45.2 billion because some third-party capacity expected during the quarter had been delayed, but it did not identify IREN at the time.
The Information reported that IREN was one of the providers involved, while a separate report Thursday said Microsoft had tightened oversight of projects involving IREN and other neocloud providers. The precise amount of Microsoft’s spending shortfall attributable to IREN has not been disclosed.
That distinction is important. The reports raise execution concerns but do not establish that Microsoft’s $9.7 billion contract with IREN has been cancelled.
IREN’s August guidance called for Horizon 2 to be commissioned and Horizons 3 and 4 to be delivered during the fourth quarter of calendar 2026. Investors will now be listening closely for whether those dates still stand and when associated revenue should begin appearing in the income statement.
The Data-Center Risk Has Become Political as Well as Operational
The earnings arrive as investors reassess the broader U.S. AI infrastructure buildout following the midterm elections.
Altimeter Capital CEO Brad Gerstner said on the All-In Podcast that 10 to 15 gigawatts of expected U.S. data-center capacity could fail to come online on schedule if political resistance and permitting restrictions intensify.
That is Gerstner’s estimate, not a confirmed reduction in planned capacity. But it captures the risk currently being priced into companies such as IREN, CoreWeave and Applied Digital: access to GPUs is only one part of the AI infrastructure equation. Power, permits, construction schedules and financing have become equally important.
For IREN, Thursday night’s numbers therefore have to clear more than a revenue estimate.
The market will be looking for the size of the cash SG&A increase, the revenue contribution from Horizon 1, the status of Horizons 2 through 4, whether Microsoft’s deployment timetable has changed and how management plans to fund the next stage of a capital-intensive expansion.
At $21.71 on Wednesday, Bernstein’s $55 target still implied substantial upside despite being cut almost in half. With IREN trading around $18.30 on Thursday, the gap has widened further. Tonight’s report has to show why that gap should close from the earnings side rather than simply from another revision to Wall Street’s targets.
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