IREN Shares Find Support at Key Technical Level

Following a week of significant volatility and pronounced selling pressure, shares of IREN are showing tentative signs of stabilization in Friday's session. While a recent analyst downgrade weighed on sentiment, the company's core growth narrative centered on AI data center infrastructure is returning to investor focus. The critical question is whether this marks the formation of a durable price floor or merely a pause before further declines.

The company's fundamental growth trajectory remains aggressive despite recent share price weakness. For the first quarter of fiscal 2026, revenue skyrocketed 355% year-over-year to $240 million. This explosive growth is being driven by a massive expansion into AI infrastructure, anchored by a landmark $9.7 billion agreement with Microsoft. This partnership signifies a strategic pivot away from pure-play cryptocurrency mining toward high-performance computing (HPC).

Management reaffirmed its target to achieve an annualized revenue run rate of $3.4 billion by the end of 2026. Plans to support this goal include the installation of an additional 40,000 GPUs in Canada. However, this rapid expansion carries substantial costs. Operating expenses reached approximately $236 million, reminding investors to balance the compelling growth story against near-term profitability challenges.

Market Reaction to Analyst Downgrade Eases

The current period of relative calm comes after a sharp sell-off earlier in the week. The downturn was triggered on December 22nd when Wall Street Zen downgraded its rating on the stock from "Hold" to "Sell," citing valuation concerns and short-term execution risks.

Should investors sell immediately? Or is it worth buying IREN?

Friday's price action, however, suggests the initial wave of selling may have subsided. Buyers have emerged above the psychologically significant $40.00 level, indicating that the negative analyst commentary may now be largely reflected in the share price. Attention is shifting back to the long-term infrastructure strategy.

Thin Trading Conditions Post-Holiday

Trading activity on the day after Christmas has been subdued, as is typical during the holiday period. The equity is currently quoted at $42.10, marking a slight recovery from its opening level. With a trading volume of roughly 10.7 million shares, turnover remains well below the three-month average of over 32 million. This limited liquidity can amplify price swings, though the stock has so far managed to avoid retesting its weekly lows.

Valuation and Forward Outlook

The current valuation reflects the high expectations embedded in the share price. With a market capitalization of $13.76 billion and a price-to-earnings (P/E) ratio of approximately 21.3, flawless execution of the company's strategy is imperative. The majority of market researchers maintain a positive stance; around 71% continue to recommend the stock as a "Buy," which contrasts with the recent downgrade.

Market participants are now looking ahead to February 2026, when results for the second fiscal quarter are anticipated. The key determinant for the future share price trajectory will be whether revenue from the Microsoft contract scales more rapidly than the operational costs of the infrastructure build-out. Until then, the stock is likely to remain in a consolidation phase, provided the $40 support level holds.