Summary I am bullish on IREN due to its industry-leading bitcoin mining efficiency and ability to maintain low production costs amid rising competition and energy prices. IREN’s strategic diversification into AI cloud services and HPC solutions positions it for resilient growth beyond bitcoin mining, capitalizing on higher CAGR opportunities in AI. Financially, IREN boasts strong revenue growth, robust liquidity, and a manageable debt profile, supporting continued expansion and operational flexibility. Given its undervaluation, superior revenue growth, and forward-thinking strategy, I reiterate a buy rating on IREN with significant upside potential despite sector risks. Thesis statement I am bullish on IREN Limited (NASDAQ: IREN ) driven by the improved efficiency of mining bitcoin from 16 J/TH in Q3’2024 to 15 J/TH in Q3’2025. The reason I think IREN’s mining efficiency is a major boost at the moment is because bitcoin mining is still profitable in 2025, but it’s becoming more competitive as more miners continue to join the blockchain market. For instance, Bitmain, Cannan, and MicroBT, which are the manufacturers of over 90% of global Bitcoin mining machines, are establishing a U.S base as a shield strategy against tariffs. This is one of the serious competitive aspects of the Bitcoin mining business. Given this competitiveness, in my opinion, the companies that have an efficient mining strategy are likely to maintain their profitability. It is from this angle I see IREN being a bullish stock. Now, let’s get to production efficiency. Bitcoin production cost in 2025 is up by 9% due to high energy prices and hashrate. Despite this increase, IREN has managed to maintain an efficient mining cost, which is a major driver of its profitability. MinerMag With the increase of hashrate from 5.6 EH/s in Q3’2024 to 29.4 EH/s in Q3’2025, an efficiency of 15 J/TH in the same quarter, the rise in bitcoin price contributed to its profitability from $8.6 million to $24.2 million. According to analysts’ prediction in 2025 that Bitcoin may hit $125,000 from its current ~$106,000 , this positions IREN in a better position to make profits from its efficient mining strategy, which is why I am bullish. I digress further in my explanations below why I believe IREN has a bullish potential. Company brief IREN Limited is a Bitcoin mining company that owns and operates its own data centers. The company also has alternative revenue generation from AI cloud services and high-performance computing (HPC) solutions. In November 2024, the company’s name was changed from Iris Energy Limited to IREN Limited, and it has maintained its headquarters in Sydney, Australia. Efficiency As A Significant Factor The median cost of mining a Bitcoin at the end of 2024 was $52,000 , and this cost has since risen to $64,000 in the first quarter of 2025. This cost is expected to increase by 9%, which is likely to hit an average of $70,000 by the end of the second quarter of 2024. Given this projected increase, IREN is installing over 50EH/s mining capacity by the end of June to compete favorably. Given that IREN is currently mining its Bitcoin at an efficient cost of $25,647 compared to its competitors, such as MARA at $51,877, CleanSpark, Inc. at $36, 139 and Cipher Mining at $44,385, it stands a chance for a bullish trend. MinerMag Now, here is the point. As the production cost increases, the production-efficient companies get some relief when cost-inefficient companies are strained by high production costs. As the production cost rises due to an increase in energy prices, IREN competitors face cost pressures . This highlights the importance of efficiency in the production of Bitcoins, which has driven companies such as Cipher Mining and IREN to post a double-digit score on stock gains between May and June of 2025, above Bitcoin’s modest price increase of 1.35% in the same period. Additionally, IREN is strategically positioning itself for revenue diversification as Bitcoin mining gets too competitive, with rising costs of Bitcoin mining and increasing network difficulty. IREN is diversifying in AI opportunities, such as pausing to expand mining at 50EH/s by the end of June 2025. IREN This broadening of revenue models positions IREN to a resilient business structure within its Bitcoin mining model to remain profitable. With approximately 2.1 million left to be minded, the mining business is getting too competitive and strenuous for a growth outlook. Adding competition and costs of fueling mining is driving a shift to AI opportunities. For example, when I look at IREN, despite ramping up its mining fleet, the pause at 50EH/s to focus on AI shows its preparation for other revenue generation activities. There are more AI opportunities compared to Bitcoin based on their CAGR. The mining market is estimated to have a CAGR of 10.57% between 2024 and 2035, which, compared to AI opportunity at a CAGR of 40% between 2023 and 2030, makes it reasonable for IREN to pause Bitcoin mining fleet enhancement. The demand for AI is ready for data centers, with an average of 70% demand for data center capacity. AI workloads are expected to advance by 2030, as seen with Gen AI, which is offering the fastest advanced AI use case. The demand for this advanced AI capacity is estimated to grow at a 33% CAGR between 2023 and 2030, which is why AI has more growth outlook compared to Bitcoin mining. The management of IREN and its ability to read the signs of time, like AI exodus from mining, shows its well-managed resilience, which is why I recommend a bullish position, McKinsey Financials; Q3’2025 highlight Due to the efficiency of production at 15 JT/H and 40EH/s, revenues in Q3’2025 increased by 164.8% YoY from $543 million in Q3’2024 to $148.2 million. The company’s diversification to AI opportunities saw AI cloud service generating a revenue increase of 500% from $0.6 million IN Q3’2024 to $3.6 million in Q3’2025. Adjusted EBITDA rose from $21.8 million in Q3’2024 to $83.3 million, reflecting an improvement in core business operations. For example, comparing Q3’2025 to Q3’2025, the average operating hashrate increased by 30% after Childress expansion from 22E.6 EH/s to 29EH/s. This increased Bitcoins mined in the third quarter by 12%, from 1,347 Bitcoin to 1,514 Bitcoin. On average, the price realized per Bitcoin increased by 11% from $84.3k to $93.3k. This was primarily driven by an increase in energy costs from $28.9 million to $36.5 million. This delivered a profit after tax of $24.2 million from $8.6 million in Q3’2024. The profits were also driven by an increase in Bitcoin in April and May of 2025, which rose from $76.0K to $111.0K. It indicates its resilience in efficiency and diversification, leading to profitability. Looking at the balance sheet, the company debt stands at $564.2 million due to a substantial convertible note of $322.5 million, which has a maturity period of 2029. Given that the company is pausing the extension of bitcoin mining enhancement at 50 EH/s by the end of June 2025. This me to a concern as to whether its debt-to-asset ratio is well managed. The total assets are $1,989.8 million, and its debt-to-asset is 0.28 or 28%, which is below the technology industry debt-to-asset ratio of 57.61% . This indicates that the current assets at IREN are capable of supporting its debt by a larger margin. Given the ample time the company has until its debt maturity in 2029, it indicates that it has a stable financial footing. Also, the company closed its Q3’2025 with cash and cash equivalents of $184.3 million and a total operating expense of $61,8 million. This shows that it has a liquidity coverage of 2.98, which is approximately 3x available cash reserves to operating expenses. The company is in a flexible position to finance its operations without strain. This can be seen in its ability to forecast expansion of 50 EH/s, which reduced capex by $43 million. Valuation I will value the company using Revenue YoY, and price-to-cash flows in relation to its competitors CleanSpark, Inc. (NASDAQ: CLSK ), MARA Holdings, Inc. (NASDAQ: MARA ), and Cipher Mining Inc. (NASDAQ: CIFR ). Based on my bullish analysis that looks at IREN’s profitability and diversification into AI opportunities, I believe these metrics are the best valuation metrics at the moment. The revenue YoY shows that IREN has a high growth at 128.24% compared to its competitors, CLSK at 89.47%, MARA at 40.57%, and CIFR at -0.65%. Seeking Alpha The price-to-cash flow of all its competitors is negative. IREN P/CF is the second highest negative at -11.26, after CIFR at -13.06. Comparing IREN with CLSK at -6.92 and MARA at -6.34, they have a relatively higher P/CF ratio, which means their cash flows are higher and match the current price. However, in terms of P/CF, IREN is undervalued given that it has the strongest revenue YoY compared to its competitors, yet P/CF is valued to be low, which is why I believe the current price is not justified. Seeking Alpha These metrics confirm that IREN has a high bullish potential driven by its capacity to mine bitcoins at a minimum cost and its shift to AI opportunities, which present a bigger revenue generation. Given its EPS normalized estimate of $0.25 and its forward PE by the end of June 2025 of 82.58x, I approximate an upside of 98% from $10 to $20. This is within analysts’ estimates of between $20.30 to $33.00. Marketbeat Investment risks Bitcoin price volatility – Bitcoin is a volatile coin, and IREN faces a risk of market correction in case of a bearish move, which means a possible loss of revenues. Energy price fluctuations – Mining has become expensive due to rising energy costs. This is a risky situation for IREN if the prices keep increasing, which may reduce its profit margins further even at its existing efficiency. Technological obsolescence – By pausing the expansion of bitcoin mining machines at 50 EH/s, IREN faces a risk of revenue decline in case another company invests in an expansion that overtakes its efficiency. Conclusion The company is an ideal investment given its bitcoin mining efficiency and its preparation to mitigate mining competition by moving to AI opportunities. I am reiterating a buy entry on IREN at the current price.
