IREN (neocloud peer to Applied Digital) continues to build contracted AI capacity, sustaining growth narrative.

IREN Limited has secured substantial contracted AI infrastructure capacity to support future revenue growth, ending the third quarter of fiscal 2026 with $3.1 billion in annual recurring revenues (ARR) under contract. The company's current operational AI cloud capacity remains fully contracted.

A major driver is IREN's $3.4 billion, five-year AI cloud contract with NVIDIA for Blackwell GPU deployments, expected to significantly increase ARR. The company has raised its ARR target from $3.7 billion to $4.4 billion, a $700 million increase expected from bringing additional GPU capacity online through existing and planned AI cloud deployments.

To support this growth, IREN is targeting 480 megawatts of AI cloud capacity and 150,000 GPUs by the end of 2026, with expansion projects underway at Childress and additional Blackwell deployments expected over the coming quarters. These investments aim to serve existing customer contracts and future demand while generating additional revenue-producing capacity.

Demand for AI infrastructure continues to exceed supply. IREN noted that customer demand is not a constraint—existing and planned capacity already has strong interest. The focus remains on execution and converting contracted capacity into revenues as new GPU clusters are deployed and commissioned. Zacks Consensus Estimates project revenue growth of approximately 46.3% in fiscal 2026 and 265.4% in fiscal 2027.

IREN faces intense competition from TeraWulf and Applied Digital in the AI infrastructure space. In May 2026, TeraWulf acquired the Muskie Data Campus, a new AI and high-performance computing development site in Eastern Kentucky with capacity for more than 1 GW. This becomes TeraWulf's second major digital infrastructure campus in Kentucky, complementing its 480 MW Justified Data campus in Hancock County, expanding its regional footprint and ability to serve AI and HPC customers across different power markets.

Also in May 2026, Applied Digital signed a 15-year lease agreement with a U.S.-based investment-grade hyperscale customer for Polaris Forge 3, its fourth AI data center campus. The facility will provide 300 MW of IT capacity supported by approximately 430 MW of utility power for large-scale AI training and inference workloads, bringing Applied Digital's total contracted lease revenues across four AI Factory campuses to approximately $31 billion.

IREN shares have surged 27.3% year-to-date, outperforming the Zacks Financial Miscellaneous Services industry's 9.8% decline. However, the company appears overvalued based on a Value Score of F; IREN trades at 6.33X forward price-to-sales compared to the industry's 2.81X. The Zacks Consensus Estimate for fiscal 2026 projects a loss of 40 cents per share, revised downward in the past 30 days, compared to earnings of 4 cents per share in fiscal 2025. IREN currently carries a Zacks Rank #4 (Sell) rating.