IREN Limited (IREN) saw its stock rise 4.7% to $57.75 in New York morning trading Thursday, recovering from an earlier dip to $54.17. The move comes after the company priced a $2.6 billion convertible senior notes offering, up from its initial $2 billion plan, marking a key test of its pivot from Bitcoin mining to AI cloud services.
The notes, carrying a 1.00% coupon and maturing in 2033, are expected to close on May 14. Initial buyers have a 13-day option to purchase up to an additional $400 million. The conversion price is set at approximately $73.07 per share, a 32.5% premium over the May 11 closing price. Capped-call transactions were also included to limit dilution, with an initial cap price of $110.30. Net proceeds are estimated at $2.57 billion, or $2.96 billion if the over-allotment is fully exercised.
This debt sale follows a major strategic partnership with Nvidia (NVDA) announced on May 7, under which the two companies will deploy up to 5 gigawatts of Nvidia DSX-based AI infrastructure across IREN's global data-center portfolio. DSX is Nvidia's blueprint for AI factories, focusing on accelerated computing systems. As part of the deal, Nvidia secured a five-year option to purchase up to 30 million IREN shares at $70 each, potentially worth $2.1 billion.
Additionally, IREN entered into a five-year AI cloud services agreement with Nvidia valued at roughly $3.4 billion. Under the deal, IREN will provide managed GPU cloud access for Nvidia's internal AI and research needs, powered by Blackwell systems at IREN's Childress, Texas site. Daniel Roberts, IREN's co-founder and co-CEO, described the offering as "fully managed cloud solutions."
Despite the strategic moves, IREN's financials remain challenging. In its March quarter, the company reported total revenue of $144.8 million, with Bitcoin mining contributing $111.2 million and AI cloud services adding $33.6 million. The net loss widened to $247.8 million. In its SEC filing, IREN highlighted risks to its AI ambitions, including the need for new customer contracts, sufficient GPU availability, data-center construction, and securing electricity and grid connections.
Wall Street's outlook on IREN is mixed. JPMorgan raised its price target to $46 from $39 but maintained an Underweight rating, citing the "circular nature" of the Nvidia deal and uncertainty around GPU access. Freedom Capital Markets' Paul Meeks called Monday's post-debt announcement drop an "overreaction to the downside," while Morningstar's Luke Yang noted that IREN may need "tens of billions more funding" to expand its data-center footprint in Texas, Oklahoma, and British Columbia.
The AI cloud race is intensifying. Competitor Nebius reported nearly eight times higher quarterly revenue on Wednesday and projected capital spending of $20 billion to $25 billion this year. "There were several customers competing for every GPU," said CEO Arkady Volozh. For IREN, Thursday's rally does not resolve the underlying challenges. The note sale provides cheaper capital, but the company must still convert contracts and construction into operational capacity. Power availability, chip supply, execution speed, and potential dilution remain key factors shaping its trajectory.
