IREN stock drops almost 4% after Gartner's negative outlook and ongoing unprofitability

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IREN slips 3.72% today to $29.39

Highlights

IREN announced a planned 900-megawatt Australian data center campus, more than doubling its domestic pipeline and expanding its AI infrastructure focus.
Recent large-scale projects and AI contract wins have driven higher costs and unprofitability, with expansion requiring further grid approvals and meeting some community opposition.
Shares of IREN trade below key moving averages, with negative momentum and indicators confirming a bearish trend and a projected $22.57 to $32.48 trading range for the next five days.

Expansion-driven cash burn weighs on sentiment amid new AI contracts

IREN, an AI cloud and data center operator, reported a significant strategic expansion by announcing a planned 900-megawatt data center campus in Wagga Wagga, Australia, which will more than double its domestic development pipeline. The company has also completed a 50MW deployment for Microsoft in Texas and secured new multi-year AI cloud contracts, including one with Anthropic, as part of its shift from bitcoin mining to AI infrastructure. These developments have involved increased costs and unprofitability, with expansion plans requiring further grid approvals and encountering some community resistance. This activity has been accompanied by broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees elevated risks in IREN Limited despite recent expansion news. He highlights persistent unprofitability and community resistance around new projects as critical weaknesses. The stock’s trading below all key moving averages and deep oversold readings signal entrenched selling momentum. Kharitonov notes that downward pressure from broader sector sentiment, combined with costly growth strategies, makes sustainability questionable. "Until IREN proves profitability or halts the technical slide below $26.69, I see little reason for optimism," he says.

Viktoras Karapetjanc, expert at Traders Union, believes IREN is positioning for long-term leadership in AI infrastructure. He views the Wagga Wagga campus, new Microsoft and Anthropic contracts, and a pivot from mining as a powerful combination for secular growth. Sector-wide pressure creates tactical pain but opens up attractive entries for strategic investors. Karapetjanc maintains the outlook is constructive with multi-year tailwinds. "Strategic expansion and major partnerships set the stage for further growth — I expect IREN to outperform once sentiment stabilizes," he states.

Parshwa Turakhiya, analyst, notes IREN is oversold but volatile following sector-driven selling. He sees a neutral-to-bearish short-term setup as technicals remain weak, yet extreme momentum readings hint at an upcoming relief bounce. The price could consolidate within $22.57 to $32.48 unless it breaks key levels at $26.69 or $29.57. "Short-term traders should watch for a volatility breakout, but protect capital until clear direction emerges," he advises.

Bearish momentum deepens as IREN breaches oversold technicals

IREN is trading below the 20-day ($41.07), 50-day ($41.39), and 200-day ($45.47) moving averages, indicating seller dominance in short-, medium-, and long-term trends. The nearest resistance is at $29.57 and support lies at $26.69, while the moving average structure highlights a bearish long-term setup. Momentum signals are negative as the MACD projects further declines and the ADX indicates a weak trend. Several oscillators reinforce deeply oversold conditions: RSI stands at 26.53, Stochastic RSI at 0, and the CCI at -172.88, with the BBP at -3.74 reflecting intraday selling momentum and the AO negative, confirming the downtrend. Today saw a downside gap near $1.63 (5.34%) and high volatility of 10.79%, with prices trading near session highs after initial losses.

Earlier, analysts noted that IREN's pivot toward AI infrastructure bolstered its outlook despite a generally cautious cross-asset environment. The latest price action now introduces heightened downside risk, with a close below $26.69 serving as the key technical trigger for further losses.

Source of Data: IREN Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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