IREN Stock Is Climbing 21%. Here’s How Nvidia Is Playing a Part.

Data-center company IREN announced it was investing another $168 million in Nvidia chips. (Akio Kon/Bloomberg)

Shares of IREN were rising sharply Friday after the data-center company reported record quarterly revenue and announced another round of Nvidia chip purchases.

IREN posted earnings of 21 cents a share for its fiscal fourth quarter, better than analysts’ consensus of 18 cents. Revenue totaled $187.3 million, a record high but narrowly below Wall Street’s forecast of $188.9 million. Cryptocurrency mining accounted for 96% of revenue.

Shares were spiking 21% to $27.82 in premarket trading Friday.

Rather than its quarterly results, IREN’s expansion from a crypto miner to an artificial-intelligence cloud services business appeared to drive the stock’s rise.

The company announced Thursday that it had secured Nvidia “preferred partner” status and purchased $168 million worth of Nvidia graphics processing units, or GPUs. The move follows the purchase of $193 million worth of GPUs earlier in the week.

Together, the purchases will expand IREN’s AI cloud to around 10,900 Nvidia GPUs over the coming months, the company said. The preferred partner status, meanwhile, strengthens the company’s supply access and helps expand its customer pipeline, said CEO Daniel Roberts on a conference call.

IREN is now targeting $200 million to $250 million in annualized AI cloud revenue by the end of the calendar year, up from just $26 million today.

“We applaud [management’s] foresight in investing early and scaling its GPU business,” wrote J.P. Morgan analysts Reginald L. Smith and Charles Pearce in a research note Friday. The company is building out sophisticated sales and infrastructure teams to support the cloud business, the analysts added.

Write to Nate Wolf at nate.wolf@barrons.com