In a report released today, Mike Colonnese from H.C. Wainwright maintained a Sell rating on IREN, with a price target of $45.00.
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Mike Colonnese has given his Sell rating due to a combination of factors, primarily revolving around the financial and execution risks associated with IREN’s recent AI cloud contract with Microsoft. While the $9.7 billion deal highlights the strength of IREN’s GPU business and has boosted investor confidence, the ambitious 12-month targets and the scale of the project present significant challenges.
Colonnese points out that IREN will need to invest approximately $8.8 billion over the next year to fulfill the contract, which includes $5.8 billion for GPUs and related equipment and an additional $3 billion for infrastructure costs. This substantial capital requirement introduces potential financing risks, as IREN plans to cover these costs through a mix of Microsoft’s prepayment, existing cash reserves, and other financing sources. Despite recent fundraising efforts, the financial strain and the complexity of executing such a large-scale deployment contribute to the maintained Sell rating.
Colonnese covers the Financial sector, focusing on stocks such as Cipher Mining, Cleanspark, and IREN. According to TipRanks, Colonnese has an average return of 92.5% and a 68.67% success rate on recommended stocks.
In another report released on October 29, J.P. Morgan also maintained a Sell rating on the stock with a $24.00 price target.