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IREN Ltd. (NASDAQ:IREN) stock climbed about 8% Tuesday as investors returned to artificial intelligence infrastructure stocks. The rebound followed a volatile Monday, when concerns about data center financing weighed on the sector.
The broader market also moved higher. The Nasdaq gained 0.47%, while the S&P 500 rose 0.12%.
IREN's rebound followed a debate over the risk of unfinished AI data centers becoming stranded assets.
Over the weekend, Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk warned on X that some data center projects could fail to generate expected returns.
"I think we're going to see a lot of stranded compute in partially complete data centers," Musk wrote. His comments raised concerns about AI infrastructure investments.
However, TeraWulf Inc. (NASDAQ:WULF) CEO Paul Prager pushed back against broader concerns about the industry. Prager acknowledged that some projects might remain unfinished. However, he defended TeraWulf's approach.
"We may move dirt early, but we don't build on spec," Prager wrote on X.
Meanwhile, Yardeni Research President Ed Yardeni offered another perspective on AI financing. Speaking Monday on CNBC's "Power Lunch," Yardeni said credit markets could help prevent excessive investment.
"The bond market is going to regulate the availability of capital to the AI trade," he said. Yardeni also suggested that AI valuations could cool without triggering a broader market collapse.
"I think air is coming out of the bubble without the bubble bursting, which is the best solution to all these concerns," he added.
The comments helped calm sentiment across AI infrastructure stocks, including CoreWeave Inc. (NASDAQ:CRWV) and Nebius Group NV (NASDAQ:NBIS).
IREN's rally appears to reflect improving sector sentiment and bargain-hunting after a prolonged decline.
The stock recently traded near its 52-week low of $24.86. Moreover, shares remain well below key moving averages despite Tuesday's advance.
As a result, traders may see the rebound as a short-term recovery attempt rather than a confirmed trend reversal.
IREN shares remain under pressure despite Tuesday's gains.
The stock trades 17.1% below its 20-day simple moving average (SMA) of $32.87. Additionally, shares remain 39.1% below their 200-day SMA of $44.74.
These gaps suggest that the broader trend remains bearish.
Furthermore, the 20-day SMA remains below the 50-day SMA. A death cross formed in August, when the 50-day SMA fell below the 200-day SMA.
That pattern continues to signal weakness in the longer-term trend.
IREN's moving average convergence divergence (MACD) indicator also points to slowing momentum.
The MACD remains below its signal line, while its histogram is negative. Consequently, buyers may need stronger momentum to sustain the rally.
Traders are watching two important price levels:
For now, IREN must overcome nearby resistance before the rally can develop into a sustained recovery.
IREN is scheduled to report its next quarterly earnings on Nov. 5, 2026.
Analysts expect a loss of 67 cents per share, compared with earnings of $1.08 per share a year earlier. Meanwhile, revenue is projected to reach $223.19 million, down from $240.29 million in the year-ago period.
Analysts maintain a Buy consensus rating on IREN shares. The stock carries an average analyst price forecast of $77.33.
Recent analyst actions also reflect mixed expectations. B. Riley Securities maintained its Buy rating but lowered its price forecast to $91 on Sept. 29.
Meanwhile, Rothschild & Co. initiated coverage with a Neutral rating and a $40 price forecast on Sept. 21. Additionally, Northland Capital Markets initiated coverage with an Outperform rating and a $99 price forecast on Sept. 18.
IREN Price Action: IREN shares rose 8.06% to $27.48 at the time of publication Tuesday, according to market data.
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