IREN (NASDAQ:IREN) stock is stuck in a bear market after falling by over 45% from the year-to-date high. This performance will be put to the test this week as the Nvidia (NASDAQ:NVDA)-backed company publishes its earnings report and as Bitcoin (CRYPTO: BTC) rebounds.
IREN to Publish Earnings as Neoclouds Growth Continues
IREN, a Bitcoin mining company that is pivoting to AI data centers, will publish its earnings report on August 27. These results will provide more information about the impact of the crypto winter on its business. They will also provide insights into its AI business and the recent acquisition of Mirantis.
IREN’s results are expected to show revenue weakness because of the crypto winter. While the company is known for its AI business today, its Bitcoin mining operations are still responsible for most of its revenue.
Its most recent results showed that its revenue dropped to $144 million in Q2 from $184 million in the same period last year. This retreat was because of lower Bitcoin prices and the decommissioning of its mining infrastructure.
Analysts expect the upcoming report to show that its revenue dropped by 25% in the second quarter to $140 million. This retreat will start to turn in Q3 as the company starts recognizing revenue from the $9.3 billion Microsoft (NASDAQ:MSFT) contract.
Analysts see the annual revenue rising by 41% this year to $422 million, followed by $2.9 billion next year. This growth is mostly because of the rising demand for its AI products and services. It recently inked a $2.8 billion deal with several companies like Figure AI and Perplexity. Also, the rising Bitcoin prices may help to boost its revenues in the last two quarters.
The company also acquired Mirantis in a $625 million deal, a provider of cloud infrastructure, Kubernetes-based orchestration, and enterprise support services.
Neocloud Momentum is Continuing
Recent earnings reports by top neocloud companies like CoreWeave (NASDAQ:CRWV) and Nebius (NASDAQ:NBIS) showed that their growth momentum is continuing.
CoreWeave’s revenue jumped by 112% to $2.6 billion, with its backlog jumping to over $104 billion. Nebius’ revenue jumped by 454% to $582 million, helped by its large deals by companies like Meta Platforms (NASDAQ:META) and Cohere. It added that demand was so strong that it could sell out 2027’s business today.
The challenge, however, is that the cost of doing business is growing, with servers and GPUs on an uptrend. Recent reports show that Nvidia is considering hiking server prices by 15% from next year. As a result, they are raising substantial sums of money through debt and equity.
IREN Stock is Facing Technical Pressures
IREN stock chart | Source: TradingView
The daily chart shows that the IREN share price has dropped in the past few months. It has moved to the 50% Fibonacci Retracement level. It has also dropped below the 100-day Exponential Moving Average (EMA), a sign that bears are in control.
Therefore, the stock will likely drop further, potentially to the support of $33.47, its lowest point in December last year and April this year. The alternative scenario is where it rebounds and moves above $50. The average estimate among analysts is $62.
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