June 27, 2025 [crocon media – dgoldsmith] IREN Limited, formerly known as Iris Energy Limited and renamed in November 2024, is a company headquartered in Sydney, Australia, that owns and operates next-generation data centers powered by 100% renewable energy. Its facilities are optimized for Bitcoin mining, AI cloud services, and other power-dense compute, with operations in locations such as Canal Flats and Prince George in Canada, and Childress County, Texas.
The company’s recent strategic shift toward AI infrastructure, combined with its existing Bitcoin mining operations, positions it to benefit from long-term trends in AI, cryptocurrency, and renewable energy. This survey note provides a comprehensive analysis of IREN’s stock valuation, considering all activities, land holdings, data center business, and potential future AI cloud activities, to estimate a theoretical stock price as of June 27, 2025.
As of June 27, 2025, IREN Limited’s stock price is $13.11, with a market capitalization of $2.86 billion, based on 241.87 million shares outstanding, as reported on Yahoo Finance. This valuation reflects a price-to-sales (P/S) ratio of approximately 15.5x, calculated using FY24 annual revenue of $184.1 million, which is higher than comparable data center companies like Digital Realty (P/S ~7.1x) and Equinix (P/S ~9.1x), indicating market expectations of significant growth.
Business Operations and Assets
- Canal Flats, Canada: 100 km from Cranbrook regional airport, 500 km east of Vancouver.
- Prince George, Canada: 500 km north of Vancouver.
- Childress County, Texas: Over 250 miles northwest of Dallas, near wind and solar facilities.
The company is developing a 2GW data center hub, including the Sweetwater 2 site (600MW, located ~28 miles from Sweetwater 1), and has announced Horizon 1, a 50MW liquid-cooled AI data center at Childress. These initiatives suggest significant land holdings, estimated at 2,000-4,000 acres for a 2GW capacity, based on industry standards of 1-2 acres per MW.
Land values for data centers vary by location, with estimates ranging from $50,000 to $100,000 per acre in Texas and Canada. For 2,000 acres at $75,000 per acre, the raw land value could be $150-300 million, but the developed value, including infrastructure, is substantially higher. Comparable data center transactions, such as Digital Realty’s $745 million acquisition of a 1.2 million square foot facility in 2021, suggest that developed data center assets command premium valuations.
Financial Performance and Growth PotentialRecent financials, as reported in the Q3 FY25 earnings on May 14, 2025, show:
- Revenue: $148.1 million, up from $119.6 million in Q2 FY25, with $141.2 million from Bitcoin mining and $3.6 million from AI cloud services, the latter growing 33% quarter-over-quarter.
- Profitability: Profit after tax of $24.2 million, with Adjusted EBITDA of $83.3 million, indicating strong margins.
- Cash Position: $184.3 million as of March 31, 2025, supporting further investment in growth initiatives.
The company’s strategic decision to pause Bitcoin mining expansion at 50 EH/s to focus on AI infrastructure, as announced in Q3 FY25, aligns with industry trends. McKinsey forecasts suggest AI-ready data center demand could reach 298 gigawatts by 2030, with 70% dedicated to advanced AI workloads, providing a significant opportunity for IREN. The AI cloud segment, currently small, could scale rapidly if IREN leverages its renewable energy-powered data centers and NVIDIA GPU capacity (1,896 H100 and H200 GPUs, as per Reuters).
To estimate a theoretical stock price, we consider the value of all activities, including land, data center operations, and future AI cloud potential. The current market cap of $2.86 billion already reflects a market-to-book ratio of approximately 2.5x, given total assets of $1.153 billion as of June 30, 2024. However, the market may undervalue land and data center assets, these assets are currently valued at zero and could rerate significantly with deal announcements.
- Land and Data Center Assets:
- Assuming 2,000 acres for 2GW capacity at $75,000 per acre, raw land value is $150 million. However, developed data center value, based on cost-to-build estimates of $10-20 million per MW, could reach $20-40 billion for 2GW, though market value depends on revenue generation.
- Comparable companies like Digital Realty ($40 billion market cap, $25 billion total assets) and Equinix ($75 billion market cap, $30 billion total assets) suggest market-to-book ratios of 1.6x-2.5x, but IREN’s growth focus may warrant higher multiples.
- Revenue and EBITDA Projections:
- Current FY24 revenue is $184.1 million. If AI cloud services scale to $2 billion annually at 50% utilization (1GW capacity, $2 million revenue per MW), total revenue could reach $2.184 billion (including Bitcoin mining at current levels).
- Assuming 40% EBITDA margin, EBITDA would be $873.6 million. At a 10x EBITDA multiple, valuation is $8.736 billion, but for growth companies, a 15x multiple yields $13.1 billion.
- Alternatively, using P/S ratio of 8.5-13x on $2 billion AI revenue alone, valuation ranges from $17 billion to $26 billion.
- Stock Price Calculation:
- With 241.87 million shares outstanding, a $17 billion valuation yields a stock price of $70.28, and $26 billion yields $107.49. This aligns with the range of $70 to $107 per share, assuming successful execution.
Risks and Considerations
- Execution Risk: Developing a 2GW data center hub and scaling AI cloud services requires significant capital and operational expertise.
- Market Conditions: AI data center demand growth must materialize, and Bitcoin price volatility could impact mining revenue.
- Competition: Established players like Equinix and Digital Realty, as well as other Bitcoin miners, may compete for market share.
Comparative Analysis
Given IREN Limited’s strategic shift toward AI, significant land holdings, and potential for AI cloud revenue growth, the theoretical stock price, if all activities are fully valued, could range from $70 to $107 per share. This estimate assumes a total valuation of $17-26 billion, driven by a scaled AI cloud business and developed data center assets, with 241.87 million shares outstanding. The current price of $13.11 suggests the market may undervalue IREN’s growth potential, particularly in AI infrastructure, but success depends on execution and market conditions.
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