Jim Cramer, the well-known CNBC host, has advised investors to take profits on IREN (NASDAQ: IREN) and other data center stocks following a powerful rally in the sector. Speaking on Friday, Cramer described the market as “a beast” when it comes to anything tied to data centers, but urged caution as the group faces a major test from upcoming earnings reports from Big Tech giants.
IREN shares opened Monday at $50.64, down 2.7% from Friday’s close, giving the company a market capitalization of approximately $15.1 billion. The stock has been on a tear, driven by investor enthusiasm for artificial intelligence infrastructure, but Cramer warned that greed should not take over for those sitting on quick profits.
“If you’re up 30% or 40% in a week, lock in some gains,” Cramer said, noting that his charitable trust had already trimmed its position in Broadcom (NASDAQ: AVGO), a key player in AI networking and custom chips. He advised investors to sell into strength on Monday to have cash ready if prices dip.
IREN, which has transitioned from a bitcoin mining company to a vertically integrated AI cloud operator, is set to report its quarterly results on May 7 for the period ending March 31. The report will be closely watched for updates on its AI cloud expansion and financial targets, particularly its $3.6 billion GPU financing deal with Microsoft (NASDAQ: MSFT) and plans for a 140,000-GPU buildout.
Big Tech Earnings Loom Large
The broader AI data center trade faces a critical week as Microsoft, Meta (NASDAQ: META), Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN) are all scheduled to report earnings. Investors are bracing for updates on capital spending plans for artificial intelligence, which could either validate the current rally or trigger a selloff if spending disappoints.
JPMorgan has noted that options markets are already pricing in higher-than-usual earnings swings for these mega-cap names, reflecting the uncertainty around AI spending. If Big Tech continues to pour money into data centers, IREN’s story could remain hot through its May 7 report. But any sign that AI infrastructure spending is peaking could vindicate Cramer’s cautious call.
IREN’s Speculative Nature
Cramer did not issue a clear sell on IREN, but he described the stock as “speculative” and pointed to concerns about the company’s fundraising plans, including an ordinary share sale and a $1 billion convertible bond offering. He noted that the stock’s valuation now hinges on demand for AI computing power outpacing the costs of building data centers and securing chips.
IREN’s last quarterly report showed revenue of $184.7 million for the December quarter, down from $240.3 million the previous quarter, and a net loss of $155.4 million. The company has flagged risks including execution issues, dependence on major customers, funding requirements, and hardware supply constraints.
Competitors such as Mara Holdings (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT) have also been pivoting to AI, but IREN has been the standout performer, surging on April 23. Cramer’s advice to take profits may be well-timed if the Big Tech earnings fail to meet lofty expectations.
