JPMorgan Double Upgrades IREN as It Bets on Higher AI Cloud Pricing

IREN has promised a much larger AI-infrastructure buildout, but investors have questioned the cost. JPMorgan now argues that improving prices for AI cloud capacity can change that equation, double upgrading the data-center operator to overweight from underweight and raising its price target to $65 from $46.

The new target implied 48% upside from the prior Friday’s close. JPMorgan analyst Richard Choe said IREN has gained momentum signing customers and could establish itself as a top-tier neocloud provider, meaning a cloud operator focused on AI computing, with backing from its strategic Nvidia partnership.

The upgrade depends on a pricing reset

JPMorgan said IREN’s newer neocloud contracts are valued at $15 to $20 per watt or more, versus $10 to $15 per watt for earlier agreements. The bank said the newer range depends on factors including contract duration and the generation of graphics processing units involved.

That higher-price assumption is central to the bank’s outlook. Choe estimated that IREN’s roughly 0.5-gigawatt expansion in 2027 could be signed at materially higher prices than past deals, and said contracts above $15 per watt would be highly accretive to its financials.

Nvidia provides the commercial anchor

IREN said in May that it signed a five-year AI cloud deal with Nvidia valued at more than $3 billion. JPMorgan cited that partnership alongside customer momentum and higher industry pricing in its case for the upgrade.

The counterweight is the scale of the planned buildout. IREN has outlined $25 billion to $30 billion in fiscal 2027 capital expenditures, along with substantial operating-cost increases. Its shares had fallen nearly 27% over the prior three months, largely amid investor doubts about those AI-infrastructure outlays.

A bullish view of future contracts

JPMorgan’s call is not a report of completed 2027 contracts. It is a judgment that higher-priced capacity agreements could make the spending more financially attractive. Whether IREN secures that pricing at expansion scale remains the commercial test behind the bank’s reversal.