Iren is running toward a technical breakout level and away from its former life of a bitcoin mining operation. The transformational story from a crypto miner to an AI infrastructure is real, helped with AI cloud services revenues that nearly doubled from $17.3 million to $33.64 million in the fiscal third quarter. The company has a long way to go to clean up their messy financials, but a partnership announced with Nvidia for a five-year AI cloud contract to deploy Blackwell GPUs across 60 megawatts of capacity in Texas will certainly help. According to Q3 earnings filing, "issued to NVIDIA a 5-year right to purchase up to 30 million shares of ordinary stock at an exercise price of $70 per share, resulting in a right to invest up to $2.1 billion." When your GPU supplier is also betting on your company, that's a meaningful signal. Back in March, Microsoft signed a $9.7 billion deal with Iren to gain access to their Nvidia GB300 chips. In turn, Iren made a separate agreement with Dell to purchase $1.8 billion in related equipment to support the deal. Again, this is not a clear-cut bullish fundamental assessment, but a bet two and three years into the future. Revenues are expected to grow from $764 million this year to $3.1 billion in fiscal 2027, to $5.82 billion in fiscal 2028 to $9.55 billion in fiscal 2029. But those revenue projections come at a cost of free cash flow projections. This is a cloudy fundamental assessment with a lot of upside — provided the financials improve. This is when you let the technicals enter the decision-making process to help decipher how the market-moving institutions with massive firepower help guide our outlook on the company. The 50-day average volume traded in Iren is 45 million shares with a 50-day moving average at $48.78, the average notional value traded in IREN is $2.2 billion dollar per day. We see a classic cup and handle pattern here in Iren with a breakout of about $75. We've already added Iren to our fast money accounts and am considering adding an initial allocation to our flagship growth portfolio at Inside Edge Capital. That allocation will be between 1%-2% with stop losses on a move back towards $60, and would like to increase the position size upon confirmation of that ~$75 breakout. Finally, and hopefully useful to you, a less meaningful signal for IREN's outlook related to an exit from crypto mining is we are short ethereum via ETHD — an inverse ethereum ETF. For today's column, I contemplated writing about that as bitcoin, ethereum and Strategy all look like they want to trade lower. Again, in other words, I'm willing to bet Iren makes a total transformation away from crypto mining and towards AI infrastructure. With the deals and revenue pipeline IREN is building, I'm willing to risk a 10% stop loss on that initial 1%-2% position. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active portfolio management and financial planning for retail investors, as well as regular market updates like the idea presented above. Visit us at https://insideedgecapital.com/cnbc . DISCLOSURES: Gordon owns IREN personally and for clients in his wealth management company Inside Edge Capital, LLC. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
