Unpacking a Potential 500%+ Upside in a Crypto Miner Turned AI Infrastructure Play
Here’s a bold call: a little-known cryptocurrency mining outfit pivoting into AI datacentres could deliver over 500% upside in the next 24 months, with a price target of around $83 per share from its current level near $13.50. Our analysis, built on rigorous number-crunching and industry comparables, suggests that this company, IREN Limited, could create staggering equity value by leveraging its 2,000 MW of capacity in Texas for high-margin digital infrastructure. This isn’t just another Bitcoin mining story; it’s a play on the insatiable demand for AI computing power, a theme dominating capital flows in 2025. With hyperscalers scrambling for capacity, we believe IREN is positioned to ride this wave, and the maths behind the opportunity is too compelling to ignore.
The Pivot: From Bitcoin to AI Datacentres
IREN, historically a player in the volatile crypto mining space, has made a strategic shift towards AI datacentres, a move that recent company announcements and industry reports suggest is already gaining traction. With plans for a 75 MW liquid-cooled facility in Texas due later this year, as reported by Data Center Dynamics, the company is tapping into a market where demand far outstrips supply. The Texas sites, boasting a total capacity of 2,000 MW, are the linchpin of this thesis. At a conservative revenue benchmark of $2.25 million per MW—aligned with pricing seen in comparable deals for digital infrastructure players—this translates to potential annual revenue of $4.5 billion once fully operational. That’s a figure that dwarfs IREN’s current market cap of roughly $3 billion.
Breaking Down the Financials: EBITDA and Value Creation
Let’s dive into the numbers with a cold, hard look at profitability and valuation. Publicly traded colocation datacentre operators, such as those in the mould of Equinix or Digital Realty, typically command EBITDA margins around 45%. Applying this to IREN’s projected $4.5 billion revenue yields approximately $2.025 billion in EBITDA at steady state. Now, layer on a 22x EBITDA multiple—a reasonable average for the sector—and we’re looking at an enterprise value increment of $44 billion from the Texas capacity alone. This isn’t pie-in-the-sky speculation; it’s grounded in observable market comps and the structural tailwind of AI-driven demand for compute power.
Of course, building out 2,000 MW doesn’t come cheap. IREN has guided capex costs of $6-7 million per MW, so let’s take the high end at $7 million, equating to $14 billion in total build-out costs. Funding structures in this space often lean heavily on debt, with a typical split of 67% debt to 33% equity. That implies IREN could raise $9.4 billion in debt and $4.6 billion in equity. Assuming equity issuance at $22 per share—a level we believe is achievable as contracts with hyperscalers are signed and sentiment shifts—that’s roughly 209 million new shares. Add that to the current 241 million shares outstanding, and we land at a diluted share count of 450 million.
The Equity Value Equation and Upside Potential
Here’s where it gets interesting. Subtracting the $9.4 billion debt component from the $44 billion enterprise value increment leaves $34.6 billion in equity value creation. Toss in IREN’s current equity value of $3 billion, and we’re at a total equity value of $37.6 billion. Divide that by the diluted share count of 450 million, and the per-share value rounds out to $83. At today’s price near $13.50, that’s a potential upside of over 500% in a 24-month horizon, assuming execution on build-out and customer contracts. As a sanity check, TipRanks recently highlighted IREN’s stock surging 102% on the back of this AI pivot, suggesting the market is starting to price in the story.
What’s not explicit in the raw numbers are the second-order effects. If IREN secures long-term contracts with hyperscalers—think the likes of AWS or Google Cloud—the stock could re-rate well before full build-out, driving a virtuous cycle of higher equity issuance prices and lower dilution. Conversely, the asymmetric risk lies in execution: delays in construction, higher-than-expected capex, or failure to lock in high-value tenants could dent the thesis. There’s also the macro angle—rising interest rates could squeeze debt funding costs, a concern echoed by macro commentators like Zoltan Pozsar in recent discussions on liquidity cycles.
Broader Context: AI Infrastructure as the New Gold Rush
Zooming out, IREN’s pivot isn’t happening in a vacuum. The AI infrastructure boom is reshaping capital allocation, with datacentre capacity becoming the choke point for generative AI workloads. Historical parallels might point to the early 2000s internet build-out, where colocation players saw explosive growth before oversupply hit. Today, however, the supply-demand imbalance feels stickier—Morgan Stanley’s latest tech infrastructure report estimates a 30% shortfall in datacentre capacity versus AI-driven demand through 2027. IREN, sitting on prime Texas real estate with access to power and cooling, could be a dark horse in this race, especially as larger players face zoning and energy constraints.
Conclusion: Positioning and a Speculative Hypothesis
For investors, the takeaway is clear: IREN offers a high-beta play on AI infrastructure with outsized upside, albeit not without risks. We’d advocate a long position with a tight stop-loss below $10 to manage downside, while keeping an eye on quarterly updates for hyperscaler contract wins—those will be the catalysts. If you’re a contrarian, consider the dilution angle as a potential overhang, but we suspect the market will look past near-term share issuance if revenue ramps. And here’s our speculative hypothesis to chew on: if IREN can bundle edge-computing capabilities into its Texas sites, it might not just match colocation multiples but command a premium akin to hyperscale cloud providers. That’s a long shot, but in a world where AI compute is the new oil, stranger things have happened. Care to bet against it?
