The rise of artificial intelligence (AI) has fueled a significant stock rally, driven initially by semiconductor stocks. However, the next wave of opportunity appears rooted in energy solutions backing AI workloads. As AI demand grows, energy scarcity has become a critical bottleneck, positioning companies like IREN (IREN) for substantial growth. Nvidia, a leader in AI chips, has illustrated the financial potential of addressing AI bottlenecks, achieving a historic $5 trillion valuation. IREN recently secured a lucrative five-year, $9.7 billion contract with Microsoft, highlighting its capacity for annual recurring revenue growth. The company aims for $3.4 billion in AI cloud annualized revenue by 2026, a striking increase from $16.4 million in 2025. With a multi-gigawatt pipeline and increasing demand, IREN is set to capitalize on the energy gap, making it an attractive investment as the AI landscape evolves. Investing in IREN could therefore yield significant returns as the energy challenges in AI are addressed.
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