Microsoft announced a strategic partnership with GPU cloud provider IREN to enhance AI infrastructure capabilities.

Broker Canaccord Genuity has declared IREN's new graphics processing unit (GPU) cloud contract with Microsoft a turning point for the bitcoin miner, firmly positioning the company in the AI infrastructure space. The broker reiterated its buy rating on the shares and raised its price target to $70 from $42, citing the five-year, $9.7 billion deal and upside from IREN's Texas data center expansion. The shares closed 6.8% lower on Friday, at $62.38.

The contract between IREN and Microsoft includes a 20% prepayment from Microsoft, a projected 32% levered internal rate of return (IRR), and the potential to shift investor focus from mining to AI, according to analysts led by Joseph Vafi. IREN will supply Microsoft with Nvidia's GB300 GPUs from its Horizon data centers in Texas, a project expected to fund about half of the $3 billion Horizon buildout. While chip and power risks remain, Microsoft's upfront payment and credit backing help reduce uncertainty, the analysts noted.

Canaccord has identified IREN's upcoming two-gigawatt Sweetwater 1 site, due online in 2026, as the next key catalyst as power scarcity drives hyperscaler demand. The broker also raised its Sweetwater valuation to $32 per share. IREN's latest quarter demonstrated strong financial momentum, showing $240.3 million in revenue, up 355% year-on-year, with Canaccord highlighting the company's scale, low-cost power and integration as advantages bridging crypto and AI.