Shares of IREN Ltd (NASDAQ: IREN) climbed over 10% on Monday, reaching $50.37, after the company announced that its massive Sweetwater 1 data center in Texas had been energized and linked to the Electric Reliability Council of Texas (ERCOT) grid. The stock hit an intraday high of $51.24, reflecting investor enthusiasm for the milestone.
The Sweetwater 1 facility, with a capacity of 1.4 gigawatts, is a cornerstone of IREN's AI cloud infrastructure strategy. The connection to the Texas grid marks a critical step in scaling up power and computing capabilities, as the company transitions from its roots in cryptocurrency mining to serving the growing demand for AI computing resources.
This development comes just days before IREN is set to report its fiscal third-quarter results on May 7. Analysts remain divided on the company's pivot, with some praising the move into AI cloud services while others caution about the execution risks and timeline. According to TipRanks, the consensus rating on IREN is Moderate Buy, with eight analysts recommending Buy, three suggesting Hold, and one advising Sell over the past three months. The average price target stands at $73.30.
Sweetwater 1 is part of a larger 1,800-acre site in West Texas that also includes Sweetwater 2, with a combined potential capacity of up to 2,000 megawatts. This space could accommodate more than 700,000 liquid-cooled GPUs—essential hardware for training and deploying AI models. However, power delivery will be phased in gradually, tied to ongoing data center construction and commissioning.
Daniel Roberts, co-founder and co-CEO of IREN, emphasized the company's disciplined execution in a statement: "Delivering Sweetwater 1 substation energization on schedule reflects our disciplined execution." The milestone reinforces IREN's position in the competitive AI infrastructure space, where companies like CoreWeave and Nebius are also vying for contracts with major tech firms.
IREN's pivot has been bolstered by a significant partnership with Microsoft, announced in November 2025. The deal, valued at $9.7 billion, involves building AI cloud infrastructure powered by NVIDIA GB300 chips at IREN's Childress, Texas site. Jonathan Tinter, a Microsoft business development executive, highlighted IREN's integrated data center and GPU capabilities, along with its secured power supply, as key factors in the partnership.
Despite the positive momentum, investors are watching for potential dilution risks. In March, IREN disclosed an at-the-market (ATM) program that could allow the company to sell up to $6 billion in ordinary shares. While such programs can fund expansion, they also risk diluting existing shareholders if used aggressively.
The Sweetwater 1 energization is seen as a tangible sign that IREN is overcoming the industry's biggest bottleneck: securing grid power for AI data centers. The focus now shifts to whether the company can convert this electricity into signed deals and deliver on its expansion plans without overextending its finances.
