Image Source: Pixabay

IREN (IREN) shares surged nearly 15% yesterday, fueled by rampant speculation of an impending partnership with Amazon (AMZN). Online trading communities buzzed with theories that IREN, a rising star in AI infrastructure, might soon announce a deal with the e-commerce giant's AWS cloud division. Neither company has issued any statements hinting at such a collaboration, leaving the rumor mill to churn unchecked.

Traders point to subtle clues, from shared earnings release timings to geographic synergies, as signs a blockbuster announcement could be imminent. This excitement underscores IREN's rapid ascent in the AI space, but is there substance behind the hype?

From Bitcoin Miner to AI Powerhouse

IREN, formerly known for its Bitcoin mining operations, has pivoted dramatically toward artificial intelligence infrastructure. This transformation leverages its expertise in high-performance computing and renewable energy sources to cater to the booming demand for AI data centers.

In recent months, IREN has secured deals with major hyperscalers, positioning itself as a key player in a market projected to reach trillions. The company's shift away from crypto volatility toward stable, long-term AI contracts has boosted investor confidence, with shares reflecting this newfound stability and growth potential.

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Fueling the Amazon Speculation

The rumor of an Amazon tie-up stems from several intriguing breadcrumbs. Foremost is IREN's landmark $9.7 billion agreement with Microsoft (MSFT) in November, demonstrating that top hyperscalers value IREN's offerings in scalable, green-powered computing. Investors see parallels with AWS needs, especially as peers like Cipher Mining (CIFR) secured a $5.5 billion, 15-year lease with AWS for AI workloads around the same time – validating the model for ex-miners turned AI providers.

IREN's aggressive data center expansions, particularly in Texas near Sweetwater and Childress, align closely with Amazon's substantial footprint in the state, suggesting logistical synergies for power, cooling, and connectivity. More tantalizingly, IREN's earnings release is slated for Feb. 5 after the stock market closes – mirroring Amazon's own schedule, potentially to synchronize major news without one overshadowing the other.

Past hints from IREN's CEO about AWS discussions add fuel, as does AWS's projected addition of 4 to 5 GW of capacity in 2026, which could require partners like IREN to meet surging demand from clients like OpenAI.

Broader momentum supports the buzz: IREN targets $3.4 billion in AI Cloud ARR by the end of 2026 through GPU expansions to 140,000 units, leveraging only a fraction of its 2,910 MW secured power portfolio. Recent multi-year contracts with additional AI firms and non-dilutive financing underscore execution strength, making IREN an attractive hyperscaler collaborator amid industry-wide power shortages.

Bottom Line

Ultimately, there's no concrete evidence beyond speculation to support an Amazon deal, rendering yesterday's 15% spike premature and unjustified. Market enthusiasm often outpaces facts, and this could fizzle without confirmation.

That said, IREN remains a compelling buy. Its AI pivot, underpinned by renewable energy advantages, sets it up for sustained growth in a trillion-dollar industry. With shares trading at undervalued multiples compared to peers, it offers an attractive entry for risk-tolerant investors.

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