IREN

IREN is the only name we've looked at this week that isn't a supplier to the AI buildout — it's trying to become part of it. The company started as a Bitcoin miner in Australia, which meant it spent years acquiring cheap renewable power and building data centers to run mining rigs. It turns out those two things are exactly what AI companies now desperately need, so IREN is in the middle of ripping out the mining hardware and replacing it with NVIDIA GPUs that it rents out. It has over 4.5 gigawatts of secured grid power, a new 1.6-gigawatt campus in Oklahoma, and signed contracts with Microsoft and NVIDIA. The stock is up roughly 666% over the past year. The financing is where it gets interesting, and where we'd want you to look closely. IREN secured $3.6 billion in GPU financing at under 6% interest, and Microsoft prepaid $1.9 billion — together covering about 95% of the cost of the chips. That's a genuinely clever structure: the customer and the lenders are funding the equipment, not shareholders. NVIDIA also agreed to invest up to $2.1 billion, though that money only fully arrives if IREN successfully deploys 600,000 GPUs. The target is $4 billion in annual recurring revenue, and management says about 85% of that is under contract. If they hit it, the current numbers look absurdly cheap. Now the other side, because this one has a lot of it. IREN is currently losing money — last reported quarter showed a $155 million net loss, and analysts expect a loss for the full year versus a profit last year. Share count rose 48% in a year, meaning your slice of the company keeps shrinking to fund the buildout. A large portion of reported earnings has been non-cash accounting gains rather than actual cash. And the entire thesis rests on execution: building data centers on schedule, installing GPUs on schedule, and having customers still want them when they're ready. Any one of those slipping breaks the math. Notably, the average analyst price target sits only about 11% above where the stock trades, which is Wall Street's way of saying the good news is already in the price. Our read: this is the highest-risk, highest-reward name on the list by a wide margin, and it's the one where position size matters more than the thesis. Next report is August 26. (written with the help of Claude)