IREN Shares Surge as Microsoft Accepts First AI Data Center Under $9.7 Billion Pact

IREN Ltd. (IREN) shares climbed more than 6.5% on Thursday after the company said Microsoft Corp. (MSFT) formally accepted Horizon 1, the first of four AI data centers IREN is building under a five-year, $9.7 billion cloud services agreement. The milestone marks the clearest signal yet that the company's pivot from Bitcoin mining to AI infrastructure is translating into actual revenue-generating deployments.

The announcement pushed IREN stock to $46.51 in afternoon trading, extending a rebound from its July low. The shares were trading about 20% above their 20-day simple moving average of $38.79, and roughly 2% above the 50-day average of $45.35, according to market data.

Horizon 1 is a 50-megawatt IT-load facility at IREN's Childress, Texas campus, equipped with Nvidia Corp. (NVDA) GB300 NVL72 systems and direct-to-chip liquid cooling. It is the first of four identical deployments scheduled for delivery in 2026, which together will supply 200 megawatts of capacity under the Microsoft contract announced in November 2025.

The acceptance carries financial weight beyond construction completion. Under the agreement, Microsoft has a contractual five-day window to test each GPU deployment against agreed criteria. Once accepted, the service term begins and IREN can start invoicing Microsoft monthly. The contract is expected to generate roughly $1.94 billion in annualized revenue once all four Horizon facilities are operational.

"Delivering Horizon 1 demonstrates the strength of our vertically integrated model and our ability to execute complex AI infrastructure projects at speed and scale," said Daniel Roberts, IREN's co-founder and co-CEO. Roberts added that the company looks forward to "building on this momentum with Microsoft" as the remaining deployments come online.

IREN also announced that Nvidia granted Horizon 1 "Exemplar Cloud" status after testing the GB300 NVL72 systems deployed at the facility. The designation validates IREN's ability to support demanding AI workloads at scale, and could strengthen the company's position when competing for additional enterprise and hyperscaler customers beyond Microsoft.

The company said it remains on track to reach 480 megawatts of gross AI Cloud capacity by the end of 2026, with a longer-term target of 1.2 gigawatts in 2027.

The Microsoft buildout arrives as IREN's original core business faces headwinds. Bitcoin trades near $63,500, roughly half its October 2025 record, and traders on Polymarket currently assign a 56% probability to the cryptocurrency touching $55,000 this year. IREN reported $511.5 million in Bitcoin mining revenue over the nine months through March, compared with just $58.3 million from AI Cloud — underscoring how recent the strategic shift is.

Management now targets more than $4 billion in AI Cloud annualized run-rate revenue by year-end, with roughly 85% already under contract. The deal requires approximately $5.8 billion in GPUs and related equipment purchased through Dell Technologies Inc. (DELL). Microsoft is due to pay 20% of the contract value upfront across the four tranches, while IREN has secured $3.6 billion in GPU financing.

Not everyone is convinced. Famed short-seller Jim Chanos has questioned the economics, warning that "this is a financing deal, with IREN taking all the risk." Horizons 2 through 4 are still due later this year, leaving execution risk on the table.

Wall Street remains broadly constructive. IREN carries a Buy consensus rating with an average price forecast of $79.67, according to analyst estimates compiled by market data providers. H.C. Wainwright recently maintained a Buy rating and raised its target to $90, while Canaccord Genuity kept a Buy with a $79 forecast. Macquarie maintained an Outperform rating with a $90 target.

Investors are now looking toward IREN's next earnings report, estimated for Aug. 27. Analysts expect a loss of 63 cents per share on revenue of $139.5 million, down from $187.3 million in revenue in the year-ago period — a decline that reflects the ongoing transition away from Bitcoin mining.

IREN's trajectory mirrors a broader industry shift. Bitcoin miners including Core Scientific (CORZ), TeraWulf (WULF) and Cipher Mining (CIFR) have pursued similar AI infrastructure strategies as mining economics have deteriorated. IREN, which listed on the Nasdaq in 2021 as a Bitcoin mining company, has gained over 10% this year and more than doubled in the last 12 months as investors reprice the stock around its AI ambitions.

The Horizon 1 acceptance clears the first major execution hurdle. Whether the returns justify the capital deployed remains an open question, but Thursday's milestone demonstrates that the company can deliver on the infrastructure commitments underpinning its multibillion-dollar pivot.