IREN stock jumped by 14% on Monday, paring back some of the losses it made last week when it tumbled to its lowest level since April 13. It remains 37% below its year-to-date high, with top analysts maintaining their bullish calls.
IREN Stock Jump After TeraWulf News
The main reason why IREN shares jumped today is that investors piled back into top AI companies. Broadcom jumped by 4.26%, while Micron, Sandisk, and Vertive rose by over 2%. As such, investors are likely buying the dip, expecting a strong rebound over time.
IREN also jumped after TeraWulf, another Bitcoin miner pivoting to AI, inked a 20-year deal with Anthropic, the creator of Claude. This deal will see it lease its GPUs to the company, expected to be worth $19 billion. Paul Prager, the company’s CEO, said:
“The Anthropic lease validates our strategy and establishes a long-duration revenue stream with one of the world’s leading AI companies. The lease provides approximately $19 billion of contracted lease revenue over its initial term.”
This announcement is a sign that there is still demand for computing power from large companies. It came a few days after Bloomberg reported that Meta Platforms was considering entering the neocloud business by leasing its extra space to other companies.
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Meta will intensify competition in an industry that has become highly saturated. For example, Anthropic is paying SpaceX over $1.2 billion a month, while Google will pay it $925 million.
In addition to the bigger giants like CoreWeave and Nebius, most Bitcoin mining companies, such as Riot Platforms, Mara Holdings, and Cipher Mining, have also entered the industry.
Analysts are still bullish on IREN stock. Jefferies has a target of $79, while Bernstein and B. Riley expect it to jump to $96. Canaccord Genuity and Cantor Fitzgerald have placed targets of $79 and $99, respectively. These analysts believe that IREN’s business will continue growing over time.
Some investors, however, are not buying it, with the company’s short interest at 18%. That’s because they are concerned about potential dilution, rising depreciation, competition, and its hefty valuation.
Another risk, according to Morgan Stanley’s Mike Wilson, is that investors may start rotating from high-growth companies to hyperscalers that have lagged the market this year.
IREN Shares Technical Analysis
The daily chart shows that IREN stock has pulled back in the past few weeks, moving from a high of $70.6 to $44 today. It recently dropped below the 50-day and 200-day Exponential Moving Averages (EMA), a sign that bears have prevailed.
It also remains between the 50% and 38.2% Fibonacci Retracement levels. Therefore, while today’s jump is encouraging, I would take it with a grain of salt since the stock remains below key levels. A complete bullish breakout will be confirmed if it rises above the 50 EMA at $52.
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