US-listed IREN is forecast to see a 20x increase in revenue by 2030, according to JP Morgan, as demand for compute continues to balloon and the price neocloud companies such as IREN can charge per MW rises.
In a note issued in September, the bank upgraded IREN to ‘Overweight’ from ‘Underweight’ and raised its price target to $65 from $46, arguing the company has become a top-tier neocloud provider backed by strong deal momentum and rising industry pricing.
The new December 2027 target implies upside of around 46% from IREN’s current share price of $44.
Valuation assumptions
The target is based on a discounted cash flow model using a 9% discount rate and 4% terminal growth rate, with a 10% public market discount applied. On JP Morgan’s numbers, IREN trades at 8.0x FY28 EV/EBITDA and 6.1x on a calendar 2028 basis. These valuations may be deemed good value if the AI boom continues.
The bank’s valuation is underpinned by forecasts of bumper revenue growth in the coming years. FY28 revenue estimates more than double to $10.3bn from $4.8bn, while adjusted EBITDA rises to $6.8bn from $3.4bn. By FY30, JP Morgan expects revenue of $23.7bn and adjusted EBITDA of $15.4bn, with margins holding around 65%.
The model takes a cautious view on dilution, using a fully diluted share count of 421m against 334m reported at the last quarter-end. This includes convertible debt, share awards and the 18.2m shares granted to the co-CEOs in July, but excludes NVIDIA warrants struck at $70, which would add a further 30m shares.
Drivers of growth
Capacity and pricing sit at the heart of the upgrade and JP Morgan’s price target. IREN ended June with 40MW of IT capacity and $1bn of operating ARR. JP Morgan expects around 400MW to be operational by the end of calendar 2026, supporting $4bn of ARR, rising to roughly $4.7bn once NVIDIA-related deployments begin in early 2027.
IREN’s contract book is anchored by a five-year, $9.7bn deal with Microsoft and a $3.4bn contract with NVIDIA, alongside a multi-year agreement with an unnamed frontier AI lab. Other customers include Perplexity, Cohere, Figure AI and Together AI.
JP Morgan notes that neocloud contract pricing has moved from $10-15 per watt to $15-20 per watt and above. Its model assumes the 0.5GW of capacity due in 2027 is signed at $12-15 per watt, which the analysts suggest may prove conservative given management is holding discussions at around $25 per watt.
There is a degree of sensitivity in JP Morgan’s assumptions that could lead to a wide range of real-life outcomes for IREN. JP Morgan estimates that signing roughly 450MW of unsigned 2027 capacity at $15 per watt would generate $6.75bn in annual revenue and an NPV of $17.5bn. That NPV falls to $8.75bn at $10 per watt but rises to $26.25bn at $20 per watt.
The bank also points to evidence that GPUs are lasting longer than the five to six years typically assumed, which would materially improve profitability given depreciation is one of the business’s highest costs.