IREN Shares Surge 20% as AI Cloud Revenue Nearly Triples

IREN stock closed up roughly 20% at about $21.64 on Friday, November 6, after the former Bitcoin miner reported AI cloud revenue of $200 million for its fiscal first quarter of 2027. That figure, up 182% from $71 million the prior quarter, nearly tripled the segment in three months and anchored a quarter that beat analyst expectations on the top line even as losses widened.

Total revenue reached $228 million, a 66% gain quarter over quarter. The AI cloud segment posted an 86% gross margin. IREN credited expanded contracts with major customers, including a frontier AI lab and a new five-year prepaid GPU agreement, for the performance. The company's revenue backlog now stands at $20.3 billion, up 22% from the previous quarter, while operating annual recurring revenue doubled to $1 billion.

Not everything in the filing flattered the company. IREN posted a net loss of $263 million, wider than analysts had projected. It also pushed back its target of more than $4 billion in ARR to early 2027.

What caused the delay?

The culprit, according to IREN, is a design change requested by Microsoft, combined with related equipment delays at the company's Childress, Texas facility. That facility anchors IREN's $9.7 billion five-year cloud services contract with Microsoft. The company stressed the $4 billion-plus ARR target remains fully contracted and funded — the delay is about timing, not demand.

Childress delivered a milestone of its own this quarter. The first Microsoft data hall at the site came online, running NVIDIA GB300 systems.

How fast is the mining-to-AI pivot happening?

Bitcoin mining revenue fell to $28 million, down from $67 million the previous quarter. That decline is deliberate. IREN has been shifting power and capacity away from mining toward AI workloads, and the shift is now visible in the revenue mix.

The comparison with last quarter is striking. In fiscal Q4 2026, mining revenue of $67 million sat close to AI cloud revenue of $71 million — a near-even split. One quarter later, AI out-earns mining roughly seven to one.

What does this change for investors?

Friday's move suggests the market is rewarding the pivot rather than punishing its near-term costs. Investors looked past a $263 million loss and a delayed milestone to focus on revenue growth and a $20.3 billion backlog.

The risks remain real. Customer concentration is the obvious one, since much of IREN's growth story runs through Microsoft and a small group of large clients. The Childress delay shows how a single customer request can shift timelines by months. Any further equipment or construction setbacks would push the $4 billion-plus ARR goal further out.

The items to watch next: progress on additional Childress data halls, updates on the early-2027 ARR timeline, and whether Bitcoin mining revenue keeps shrinking as capacity shifts toward GPU racks.