IREN jumps 20% after quarterly results and new contracts as Microsoft tightens oversight
Key Facts
IREN shares rose 20% in the November 6 session, rebounding after a selloff in AI stocks on the company’s announcement of two new post-quarter contracts, according to the Associated Press. CoreWeave shares gained 6.3% in the same session, while the Nasdaq Composite rose 1.1% and the S&P 500 gained 0.3%. The move came a day after a Reuters report said Microsoft had tightened oversight of some data center projects at Nebius, IREN and Nscale. Shares of the three companies came under pressure in the November 5 session, with IREN down about 17%, Nebius about 14% and CoreWeave closing down about 10%. The next day’s rebound refocused attention on IREN’s results and new contracts, while execution and expansion funding concerns remained in the background.
Reuters said Microsoft was moving away from projects it considered risky and was internally discussing whether to sign new deals with specialized cloud computing companies, without ruling out such deals entirely. The report said the company was focusing on expanding its own data centers rather than adding new agreements with these companies. A Microsoft spokesperson said its approach combines company-owned data centers, leased facilities and strategic partnerships with external providers. This mix shows that outside suppliers continue to play a role in the company’s infrastructure plan alongside investment in its own assets. In IREN’s case, the company said delivery of some AI infrastructure to Microsoft was delayed after Microsoft requested changes to the network design, and that the delay related to those changes would not result in financial penalties.
The project review came as Microsoft reported strong growth in its cloud business. Azure revenue rose 48% in the quarter ended September 30, 2026, and the company said the result exceeded expectations, attributing the growth to Foundry and improved CPU capacity investment. Microsoft also cited a delay in third-party capacity during the quarter, putting the execution of external projects among the constraints on expansion. The company’s revenue totaled $92.3 billion in the same period, up 19% year over year. The figures combine rising demand for Azure services with the need to add capacity, which requires a mix of owned data centers, leased facilities and partnerships.
IREN reported a net loss of $263 million in the quarter ended September 30, 2026, compared with a loss of $684 million in the previous quarter. Adjusted earnings before interest, taxes, depreciation and amortization were $66 million, versus $19 million in the quarter ended June 30. In its statement, IREN said its contracted revenue backlog rose 22% quarter over quarter to $20.3 billion, with about two-thirds of that backlog linked to investment-grade counterparties. It said its target of exceeding $4 billion in annual recurring revenue is contracted and fully funded under the company’s definition and financing terms. The Associated Press reported that quarterly results came in stronger than analysts expected, and IREN also announced two new contracts signed after the financial period ended.
The new contracts include a five-year agreement at an estimated annual price of about $22 million per megawatt of IT load, with an upfront customer payment covering 90% of the capital expenditure for GPUs associated with the contract. The company also announced a short-term contract at an estimated price of $40 million per megawatt. By contrast, IREN estimated remaining planned capital expenditure for fiscal 2027 at about $15 billion. It said $9 billion is expected to be covered by cash, committed financing and upfront payments, while coverage of another $6 billion depends on targeted financing and other sources subject to market conditions. These figures show the scale of funding required as the company executes AI projects and expands operating capacity.
The announced delivery dates put the next execution milestones before the company: IREN targeted delivery of Horizon 2 to 4 phases in stages during the fourth quarter of 2026, with grace periods extending from mid-quarter to the start of the second quarter of 2027. Microsoft received and accepted the first phase, Horizon 1, in August 2026. This follows delays to some infrastructure after Microsoft requested changes to its network design, according to Reuters’ account of IREN’s comments. While the company announced a target of more than $4 billion in annual recurring revenue by January 2027, completing the delivery phases and meeting financing requirements remain part of the path to that goal. The announced delivery dates and funding sources show the amount of execution work remaining during fiscal 2027.