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

The bank’s new $65 target rests on richer contracts and IREN’s Nvidia relationship, while a $25 billion to $30 billion 2027 spending plan remains the central risk.

By 2 min read
JPMorgan Double Upgrades IREN as It Bets on Higher AI Cloud Pricing
JPMorgan Double Upgrades IREN as It Bets on Higher AI Cloud Pricing

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JPMorgan has reversed course on IREN, moving the stock from underweight to overweight and lifting its price target from forty-six dollars to sixty-five. That target implied forty-eight percent upside from the previous Friday’s close. The reason is a bet that AI cloud pricing is resetting higher. JPMorgan analyst Richard Choe says IREN’s newer contracts are being priced at fifteen to twenty dollars per watt or more, compared with roughly ten to fifteen dollars for earlier agreements. The difference depends partly on contract length and the generation of graphics processing units being supplied. That pricing could make IREN’s planned half-gigawatt expansion in 2027 far more attractive financially. But this is an assumption about future deals, not a report that the 2027 capacity is already contracted. IREN expects to spend twenty-five to thirty billion dollars in fiscal 2027, while also absorbing significantly higher operating costs. Those spending plans helped drive the shares down nearly twenty-seven percent over the prior three months. JPMorgan is also pointing to IREN’s commercial relationship with Nvidia: in May, IREN announced a five-year AI-cloud agreement with Nvidia worth more than three billion dollars. The bank sees that partnership, customer momentum, and higher prices as support for IREN becoming a top-tier neocloud provider. The key test is whether IREN can secure comparable pricing at the much larger scale of its 2027 buildout.

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3 key points

JPMorgan’s bullish reversal on IREN rests on a pricing thesis, not signed 2027 capacity: newer AI-cloud contracts reportedly command $15–$20+ per watt, above the $10–$15 range for earlier deals. The bank believes those economics could support IREN’s planned 0.5-gigawatt 2027 expansion despite projected fiscal 2027 capex of $25 billion–$30 billion. Its $65 target represents 48% upside from the cited prior close, but...

  1. 01

    JPMorgan raised IREN’s target to $65 from $46 and moved its rating from underweight to overweight.

  2. 02

    IREN’s newer contracts are reportedly priced at $15–$20+ per watt, versus $10–$15 for earlier agreements.

  3. 03

    IREN signed Nvidia a five-year AI-cloud agreement worth more than $3 billion in May.

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.

Sources

  1. cnbc.comJPMorgan double upgraded a data center stock that struck a deal with Nvidia earlier this year

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