Microsoft invests $9.7 billion in IREN.

Microsoft Takes the Reins with IREN

Microsoft's approximately $9.7 billion deal with IREN represents a significant transformation in the cryptocurrency mining sector. In a statement made on Wednesday, Australia-based IREN has become Microsoft's largest customer. Under the five-year agreement, this neo-cloud operator specializing in data centers for artificial intelligence workloads will provide Microsoft access to Nvidia chipsets.

IREN shares experienced a 10% increase on the first day and have recorded approximately a 580% rise since the beginning of the year.

In addition, IREN formed a partnership with Dell Technologies worth approximately $5.8 billion to purchase processors and related equipment. This agreement reinforces the transformation of cryptocurrency miners into a central player in the artificial intelligence wave and takes advantage of opportunities to use land, energy, and data centers for AI workloads with long-term contracts.

Many miners, including Riot, TeraWulf, and Cipher Miner, have directed their resources toward high-performance computing infrastructure and artificial intelligence. This shift has resulted in respective year-to-date increases of 100%, 160%, and 360% in their stocks.

Bernstein analyst Gautam Chhugani and his team stated, "Bitcoin miners are now an integral part of the AI value chain. They are providing warmed power shells for AI data centers, which is considered to be the biggest bottleneck for execution."

Chhugani added, "Every Bitcoin miner listed on the US stock exchange has gone through a transformation to optimize the value of energy assets rather than maximizing Bitcoin earnings." Fluctuations in Bitcoin prices and a crowded mining field have compressed profit margins, while the four-year 'halving' event in Bitcoin has further eroded revenues over time.

IREN announced earlier this year that it would cease expanding its Bitcoin mining operations and prioritize its AI cloud and data center business. Bernstein has given the stocks a target price of $75 with a rating of 'Buy', stating, "We believe there is still room for multiple expansions as IREN continues to scale its AI business."