IREN Limited (IREN) is making a big bet on NVIDIA's latest hardware to power its AI cloud business. On Tuesday, the company announced it signed a purchase agreement with Dell Technologies Inc. (Dell) for NVIDIA Corp. (NVIDIA) air-cooled Blackwell systems. The deal is part of a previously announced five-year, $3.4 billion managed-services AI cloud contract.

The new hardware will be deployed at IREN's existing data centers in Childress, Texas, with commissioning expected in early 2027. IREN says the expansion is designed to accelerate "time-to-compute," which it describes as a major bottleneck in the AI industry. Once the systems are up and running, IREN expects its annualized run-rate revenue (ARR) to jump from $3.7 billion to $4.4 billion, reflecting growth in GPU capacity and monetization across its AI cloud platform.

The $1.6 Billion Hardware Deal

The agreement with Dell carries a total purchase price of about $1.6 billion. That includes GPUs, servers, storage, networking equipment, integration services, and warranties. Payment terms are structured on a post-shipment basis, and IREN says it is also pursuing GPU financing tied to the deployment, consistent with how it has handled previous hardware rollouts.

Daniel Roberts, co-founder and co-CEO of IREN, emphasized the urgency of the deal. "Securing capacity and accelerating commissioning are our top priorities in a market where time-to-compute is everything," he said. He added that "hyperscalers, enterprises and developers choose IREN as a partner because we own and control the full stack – the physical infrastructure, the compute, and the operational capability to deploy at scale." Roberts also noted that IREN's relationship with Dell "ensures access to hardware at the scale and speed the market demands."

ARR Guidance and Caveats

The projected $4.4 billion ARR includes expected annual revenue from IREN's contract with Microsoft Corporation (Microsoft), the previously announced AI cloud agreement, and planned GPU deployments at its British Columbia and Childress facilities. But IREN is quick to point out that this figure is based on internal assumptions about GPU models, utilization, and pricing. The company warns that the ARR target is not fully contracted and could differ materially depending on GPU delivery timelines and commissioning progress.

What's Next for IREN Stock

Investors are looking ahead to IREN's next earnings report, expected around August 27, 2026. Analysts are forecasting a loss of 34 cents per share, down from a loss of 66 cents a year ago, on revenue of $210.58 million, up from $187.30 million. The stock trades at a lofty P/E of 77.6x, indicating a premium valuation relative to peers.

Wall Street remains bullish overall. The stock carries a Buy consensus with an average price target of $67.29. Recent analyst moves include Macquarie raising its forecast to $90.00 (Outperform), JPMorgan raising to $46.00 (Underweight), and HC Wainwright & Co. raising to $85.00 (Buy).

Price Action

IREN shares were up 3.38% at $61.80 during premarket trading on Wednesday, according to market data.