Daily Observation of Cryptocurrency Concept Stocks: IREN's $9.7 billion Microsoft contract is being fulfilled, and the valuation inflection point for mining companies' AI transformation has arrived

Analysis of the Structure of the $9.7 Billion Microsoft Contract

IREN disclosed a 5-year, $9.7 billion AI cloud contract signed with Microsoft in Q1 of fiscal year 2025, covering a 200 MW IT load at the Childress site in Texas; the contract includes a 20% prepayment from Microsoft (significantly improving capital efficiency) and approximately $5.8 billion in joint procurement of Dell GPUs. From the numbers, $9.7 billion ÷ 5 years ≈ $1.94 billion annual recurring revenue (ARR), with a project EBITDA profit margin of about 85%, corresponding to an annualized EBITDA contribution of approximately $1.65 billion. IREN also holds a long-term power purchase agreement (PPA) associated with the Childress site, effectively locking in the predictability of electricity costs. Jefferies analysts pointed out that the financing structure of the Microsoft contract allows IREN to execute the project with an "unlevered IRR above 20%," meaning that the contract itself can generate substantial shareholder returns without relying on external debt.

GPU Expansion and ARR Path: From $1.94 Billion to $4.4 Billion

IREN plans to expand its GPU fleet from approximately 23,000 units (by the end of 2025) to 150,000 units (by the end of 2026, with 50,000 NVIDIA B300 GPUs already purchased), targeting an ARR of $4.4 billion (including the Microsoft contract and subsequent AI service expansions). The path from the initial ARR of $1.94 billion to the target ARR of $4.4 billion relies on the construction and delivery of Phase 2 of the Childress site (expected to complete key milestones in H2 2026). Cantor Fitzgerald's target price of $99 corresponds to about a 70% premium over the current stock price, with its valuation framework pricing based on "AI data center infrastructure" rather than "Bitcoin mining companies"—this framework switch is central to IREN's 2026 valuation story and serves as the logical starting point for Jefferies' coverage with a target price of $79 based on "AI infrastructure valuation logic."

Horizontal Comparison with TeraWulf: Differences in Two AI Transformation Paths

In today's news, TeraWulf's Q1 HPC revenue has first surpassed mining revenue, representing two different AI transformation paths compared to IREN's $9.7 billion single large contract: TeraWulf is characterized by multi-tenant decentralization (Core42, Fluidstack), zero-carbon energy (nuclear + hydro), and a gradually established capacity of 522MW; IREN is characterized by a high concentration of a single strategic customer (Microsoft dominates), ultra-large-scale GPU procurement, and high ARR concentration. The risk-return structure of decentralization vs. centralization has its pros and cons: TeraWulf's multi-tenant structure makes its revenue more resilient, but the scale of a single contract is smaller; IREN's Microsoft contract provides a $9.7 billion certainty ARR anchor but also means concentrated renewal risk for the Microsoft contract. Currently, both are widely rated as Buy by analysts, but IREN's single contract certainty leads to a more consistent target price distribution ($79---$99), while TeraWulf's multi-tenant decentralization makes its valuation harder to unify.

BTC ETF 10-Day Outflow Streak Ends, Providing Bottom Support for Mining Sector

On July 3, Bitcoin spot ETF saw a single-day inflow of $221.7 million, ending a 10-day streak of net outflows, which has dual positive effects on the mining sector: first, the reversal of ETF fund flows indicates a temporary easing of downward pressure on BTC prices, supporting the book value of mining companies' BTC holdings; second, as institutional funds return to Bitcoin ETFs, interest in allocating to "AI + Bitcoin" dual-track model companies (such as IREN and TeraWulf) is also rising—CryptoTimes analysis points out that Wall Street is redefining the mining sector from "high-risk Bitcoin Beta stocks" to "AI infrastructure alternative investments." For IREN, the legislative progress of the CLARITY Act after Congress reconvenes on July 13, along with the signals regarding the interest rate path from the FOMC meeting minutes (to be released this week), will jointly determine whether the AI computing infrastructure sector can achieve sustained capital inflows in H2 2026—if both variables release positive signals, IREN's average analyst target price of $81 is expected to be validated within the year.

Data source: https://bbx.com/ Crypto concept stock information database, compiled based on yesterday's announcements from global listed companies and SEC/TSE disclosure documents.