In a surprising turn of events, shares of bitcoin mining company IREN surged nearly 30% on Wednesday following the company’s fiscal first-quarter earnings call. The dramatic price movement was fueled by two key revelations from IREN executives: renewed interest from a major artificial intelligence (AI) firm in hosting computing infrastructure at IREN’s facilities, and the potential for the miner to pay a dividend in bitcoin as early as 2025.
Hyperscaler Comes Knocking
During the conference call, IREN co-CEO and co-founder Daniel Roberts disclosed that the company had been approached by a trillion-dollar hyperscaler—a large cloud service provider—about potentially hosting AI-related computing machines at IREN’s Sweetwater mining site in Texas. This marks a significant shift in the hyperscaler’s stance, as they had previously expressed disinterest in the facility.
“Two hours ago, we got an email from a trillion-dollar hyperscaler that said they weren’t interested in Sweetwater, and now they are,” Roberts revealed, without providing further details due to the sensitive nature of the negotiations.
The renewed interest from the hyperscaler underscores the growing trend of bitcoin miners diversifying their revenue streams by securely hosting data centers for tech giants looking to support the surging demand for AI and high-performance computing (HPC). This shift gained momentum earlier this year after Bitcoin’s fourth halving event, which reduced mining rewards by 50% and squeezed profit margins for many operators.
Following in CORZ’s Footsteps
IREN’s rival, Core Scientific (CORZ), was among the first to capitalize on this trend, signing multi-billion dollar AI hosting deals that sent its stock price soaring. Other miners have since followed suit, seeking to carve out a piece of the lucrative AI infrastructure market.
In July, IREN appointed Morgan Stanley to explore opportunities to monetize its mining facilities for the AI data center market. However, the company’s share price had languished for most of the year, underperforming its peers after a short seller raised doubts about the suitability of one of its sites for AI hosting. The latest developments from the earnings call appear to have altered market sentiment, propelling IREN’s stock to outperform the sector on Wednesday.
Bitcoin Dividend on the Horizon?
Perhaps even more tantalizing for investors was the prospect of IREN paying a dividend in bitcoin. CFO Belinda Nucifora suggested that the company’s strong cash flow generation could support a potential distribution to shareholders as early as 2025.
“The achievement of positive operating cash flows may support a potential for investor distribution in calendar year 2025,” Nucifora stated during the call.
The notion of a bitcoin dividend is likely to be well-received by the market, as investors increasingly seek exposure to the surging cryptocurrency. Beyond direct spot purchases, traders are exploring alternative avenues to gain bitcoin exposure, such as exchange-traded funds (ETFs) and shares of publicly-traded companies like MicroStrategy (MSTR) and MARA Holdings (MARA) that are actively accumulating BTC.
Low-Cost Mining Advantage
IREN’s ability to mine bitcoin at a significantly lower cost of around $29,000—compared to the current market price of nearly $96,000—positions the company to accumulate BTC at discounted prices, setting it apart from other firms that pay spot prices for their holdings.
“When you look at the market today and you see a number of different companies accumulating bitcoin on their balance sheet, paying market price or close,” Roberts observed. “I think the opportunity to generate $29,000-cash-cost bitcoin for investors and effectively distribute that coin out either through the physical coin … or as cash flow is pretty powerful.”
As IREN continues to navigate the evolving landscape of cryptocurrency mining and AI infrastructure hosting, the company’s ability to leverage its low-cost mining operations and attract hyperscale partners could prove to be a potent combination. With the prospect of a bitcoin dividend on the horizon, IREN’s stock surge may be just the beginning of a new chapter for the ambitious mining firm.
While the road ahead is not without challenges, IREN’s recent developments have reignited interest in the company and its potential to become a major player in both the crypto mining and AI hosting arenas. As negotiations with hyperscalers progress and the company’s cash flow strengthens, investors will be closely watching to see if IREN can deliver on its promises and usher in a new era of growth and profitability.
