# Jefferies projects IREN’s AI cloud business to outperform data center leasing with 30% upside > Source: > Published: 2026-06-18 18:23:45+00:00 # Jefferies projects IREN’s AI cloud business to outperform data center leasing with 30% upside The former Bitcoin miner is sitting on 6 GW of power capacity and using barely a tenth of it, which Jefferies thinks makes it one of the most undervalued plays in AI infrastructure Jefferies initiated coverage on IREN Limited with a Buy rating and a $79 price target, projecting roughly 30-36% upside from recent trading levels near $58. The thesis is straightforward: IREN’s AI cloud services business will generate better returns than simply leasing out data center space, and the market hasn’t fully priced that in yet. The investment bank estimates that only about 10% of IREN’s approximately 6 GW global power portfolio is currently being utilized. That’s a staggering amount of untapped capacity for a company that has already locked in $9.7 billion worth of contracts with Microsoft over five years. ## From Bitcoin mining to AI powerhouse IREN, formerly known as Iris Energy, has undergone one of the more dramatic strategic pivots in the crypto-adjacent infrastructure space. The company started as a Bitcoin miner running renewable-powered data centers. Now it’s repositioning itself as an AI and high-performance computing services provider. The numbers tell the story of a company in mid-transformation. Of IREN’s secured power capacity exceeding 4.5 GW, roughly 810 MW is operational and 2,100 MW is under construction. Jefferies projects that IREN’s AI cloud services could reach an annualized run-rate revenue exceeding $500 million by early 2026 from GPU deployments alone. Meanwhile, the Microsoft contracts are expected to contribute approximately $1.9 billion in annual revenue, pushing the company’s total annual recurring revenue potential to around $3.1 billion. ## Expansion beyond North America IREN recently completed its acquisition of Nostrum Group, adding about 490 MW of capacity in Europe. It also announced plans for an 800 MW campus in Australia, marking a deliberate push to diversify its geographic footprint. The stock market has noticed. IREN’s share price has surged nearly 500% over the past year, reflecting investor enthusiasm for its dual exposure to cryptocurrency mining and AI infrastructure. ## Competitive landscape and what investors should watch IREN isn’t operating in a vacuum. The AI cloud infrastructure space has attracted serious competition. CoreWeave and Nebius are both fighting for the same hyperscaler contracts and enterprise AI workloads. The distinction Jefferies draws between AI cloud services and traditional data center leasing is central to this analysis. Leasing out data center space is a relatively low-margin business where the landlord provides the building and power while the tenant brings the compute. AI cloud services, by contrast, mean IREN owns and operates the GPUs, selling compute directly to customers. The margins are significantly higher, but so is the capital expenditure and operational complexity. Investors watching this space should track three metrics closely: IREN’s pace of converting secured power capacity to operational capacity, the ramp rate of its AI cloud revenue against that $500 million annualized target, and whether additional hyperscaler contracts follow the Microsoft deal. The gap between 810 MW operational and 4,500+ MW secured is where the entire bull case lives, and it’s where the execution risk concentrates too. **Disclosure:** This article was edited by Editorial Team. For more information on how we create and review content, see our [Editorial Policy](https://cryptobriefing.com/editorial-policy/).