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IREN Ltd. (IREN) stock rose about 6% Monday, rebounding after a sharp selloff in artificial intelligence infrastructure stocks last week.
The recovery came as investors returned to technology stocks. The Nasdaq gained 1.35%, while the S&P 500 rose 0.57%.
However, IREN shares remain down more than 25% over the past week. The decline followed mounting concerns about AI infrastructure debt, hotter-than-expected inflation and the long-term outlook for smaller cloud providers.
Investor concerns intensified after debt pressures at CoreWeave Inc. (CRWV) raised questions about the cost of financing AI data centers.
Meanwhile, research firm Gartner warned that more than 80% of neocloud providers could cease operating independently by 2030.
The outlook added pressure to companies that rely on heavy capital spending to expand computing capacity.
IREN, which is shifting from bitcoin mining toward AI cloud services, remains exposed to those concerns.
CNBC's Jim Cramer recently expressed caution about IREN despite reports of a multiyear cloud computing agreement with Anthropic.
During CNBC's Mad Money Lightning Round, Cramer questioned whether the reported agreement had been confirmed.
He said CoreWeave was the only neocloud company he trusted enough to invest in.
Neither IREN nor Anthropic has publicly confirmed the reported agreement.
Silvant Capital Management's Michael Sansoterra also warned about increasing competition in AI cloud infrastructure.
He told CNBC Friday that smaller providers such as CoreWeave face significant challenges competing with technology giants.
These larger companies benefit from stronger balance sheets, established customer relationships and extensive infrastructure.
Sansoterra expects major cloud providers to capture much of the economic profit from AI spending. However, he acknowledged that some neocloud companies could still deliver attractive investment returns.
For IREN, growing demand for AI computing offers opportunities. Still, financing costs and competition could weigh on future profitability.
Monday's gains appeared tied to improving sentiment toward technology and AI infrastructure stocks rather than a new company-specific announcement.
The broader market recovery helped IREN rebound from last week's losses.
However, investors remain cautious about the substantial funding required to expand AI data center capacity.
Despite Monday's rebound, IREN remains down 52.13% over the past 12 months.
At $28.63, the stock trades below its 20-day simple moving average (SMA) of $38.48 and its 200-day SMA of $45.32.
Its relative strength index (RSI) stands at 26.78, indicating oversold conditions. While that could support a short-term recovery, it does not confirm a lasting reversal.
The stock also remains in a bearish technical pattern following a death cross in August, when its 50-day SMA fell below the 200-day SMA.
The 20-day SMA near $38.48 represents a potential resistance level. Meanwhile, the 52-week low of $26.60 provides a key support level.
The stock carries a consensus Buy rating, with an average analyst price forecast of $77.33.
Recent analyst actions include B. Riley Securities maintaining its Buy rating while lowering its price forecast to $91 on Sept. 29.
Rothschild & Co initiated coverage with a Neutral rating and $40 price forecast on Sept. 21. Northland Capital Markets initiated coverage with an Outperform rating and $99 price forecast on Sept. 18.
IREN has a weak momentum score of 5.42, according to MarketDash Edge Rankings.
The reading reflects persistent selling pressure despite Monday's recovery.
While oversold conditions could support further gains, the stock remains below major moving averages, suggesting that its broader downtrend has yet to reverse.
IREN shares were up 6.08% at $28.63 at the time of publication Monday, according to market data.
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