- IREN stock has formed a cup-and-handle pattern, pointing to more gains.
- The company inked a major partnership deal with NVDA this week.
- IREN aims to become a major player in the neocloud industry.
IREN stock price surged to its highest point since November last year as investors cheered its partnership with NVIDIA, the biggest company in the world. It rose to $65.38 and then pulled back to $60 as the needs settled. It remains 96% above its lowest level this year. Technical analysis suggests that the stock may surge to over $90.
IREN Stock Jumps After NVIDIA Investment, but Key Challenge Remains
IREN, a top Australian Bitcoin mining company that is slowly transitioning to become a major player in the AI data center industry, soared after announcing a major partnership with NVIDIA.
This partnership will see the two companies develop up to 5GW of NVIDIA DSX chips across its global pipeline. They will also collaborate on the deployment of DGX chips across its plants. As a result, it issued NVIDIA a right to buy up to 30 million shares for $70, totalling $2.1 billion.
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IREN becomes the third major neocloud company that NVIDIA has invested in. It has become the biggest shareholder in CoreWeave, the biggest player in the industry. It invested $2 billion in CoreWeave earlier this year. Also, it invested $2 billion in Nebius.
Still, despite this optimism, IREN’s business is facing some major headwinds, which explains why the short interest has jumped to over 15%. For one, the company has not announced a major customer deal after the $9.7 billion deal with Microsoft.
In contrast, CoreWeave announced that its revenue backlog rose to nearly $100 billion, helped by top deals with top companies like Microsoft, Meta Platforms, Anthropic, and OpenAI. Nebius also announced major deals with companies like Meta Platforms and Microsoft. These two companies have become a duopoly in the industry.
Still, on the positive side, the company will likely attract more deals as it continues ramping up its data centers. It hopes to scale its operations to 150,000 GPUs, which will have 480 MW. It will then have 1,210 MW by 2027 and 5Gw by 2028.
The most recent results showed that IREN made over $144 million in the last quarter, down from $184.7 million in the same period last year. This decline was mostly because of the Bitcoin prices and the fact that it is decommissioning some of its Bitcoin mining operations. It recorded a net loss of over $140 million.
Another main challenge is that the company will need to raise cash in the next few years to fund its data centers. It hopes to fund these operations with its cash, GPU financing, and its operating cash flow.
IREN Share Price Technical Analysis
The daily chart reveals that the IREN share price has been in a strong uptrend in the past few weeks, rising from $30.50 in March to $60 today.
It has formed a giant double-bottom pattern at $33.65 and a neckline at $62.95, its highest point in January this year. It has moved above the 50-day and 100-day Exponential Moving Averages (EMA).
The distance between the neckline and the double-bottom is about $30. Adding this number to the neckline of $63 gives it a target price of $93, which is about 52% above the current level. This view will be confirmed if it moves above the key resistance levels at $76.45.
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