IREN Stock: B. Riley Says Buy the Dip as Microsoft Deal Powers Forward

Table of Contents

TLDR

IREN stock has dropped 47% from its November 5 high, underperforming other bitcoin miners and GPU cloud competitors
Investment bank B. Riley maintains its buy rating and $74 price target, viewing the selloff as a buying opportunity
The company faces a $2.7 billion funding gap but has secured $8.85 billion in capital through various financing deals
IREN’s Microsoft partnership includes a $1.94 billion prepayment and plans for 76,000 GPUs at the Childress campus
B. Riley analysts say the decline reflects weak AI sentiment rather than fundamental problems with the business

Bitcoin miner IREN has seen its stock price tumble 47% since hitting a 52-week high on November 5. The company now trades at $36.82, down 8.2% in early trading on Monday.

IREN Stock Card
IREN Limited, IREN

But investment bank B. Riley sees opportunity where others see trouble. The firm kept its buy rating and $74 price target on the stock in a report released Monday.

Analysts Nick Giles and Fedor Shabalin wrote that IREN’s drop is much steeper than its peers. Other bitcoin miners fell about 25% on average during the same period.

GPU cloud companies CoreWeave and Nebius dropped 31% and 25% respectively. That makes IREN the worst performer in its group by a wide margin.

The B. Riley team believes this is a sentiment problem, not a business problem. They called it a “sentiment-driven reset” rather than a break in the company’s fundamentals.

IREN has a history of sharp swings in both directions. Between October 22 and November 5, the stock jumped 47% while its HPC peer group only gained 13%.

The analysts say this pattern shows IREN tends to overshoot in both directions. That creates buying opportunities for investors who can stomach the volatility.

Microsoft Deal and Funding Strategy

IREN has big expansion plans that will cost about $11.6 billion in HPC capital expenditures. The company currently has about $8.85 billion in capital lined up, leaving a $2.7 billion gap.

The Microsoft partnership forms the backbone of this strategy. Microsoft made a 20% prepayment of $1.94 billion for GPU capacity at the Childress campus in Texas.

That facility will house 76,000 GPUs worth about $8.8 billion. IREN has also secured an estimated $2.5 billion in financing specifically for 76,000 GB300 GPUs tied to the Microsoft deal.

The company raised more money through $2.3 billion in new convertible senior notes due in 2032 and 2033. Net proceeds of about $2.27 billion helped fund a capped call agreement with an initial cap price of $82.24 per share.

IREN used some of that money to buy back older debt. The company repurchased about $227.7 million of 2030 notes and $316.6 million of 2029 notes for a combined price of roughly $1.63 billion.

A registered direct offering completed on December 8 added more firepower. IREN sold 39.7 million ordinary shares at $41.12 per share to strengthen its balance sheet further.

The company also has about $1 billion in cash and equivalents on hand. Other planned projects include $900 million for 23,000 GPUs at Prince George and $1.85 billion for 40,000 GPUs at Mackenzie and Canal Flats.

B. Riley says IREN still has multiple funding options available to close the remaining gap. The bank believes the selloff gives investors a chance to buy before AI sentiment improves.

The December 2 share offering and recent convertible note deals show the company can still access capital markets despite the stock price decline. IREN closed the registered direct offering six days after announcing it.

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