Bitcoin miners IREN and Hut 8 saw shares surge Monday following the announcement of massive, multiyear cloud services contracts. IREN secured $2.8 billion in agreements with major AI developers, while Hut 8 finalized a $9.8 billion lease expansion in Texas. These deals underscore a broader industry pivot toward supplying high-density computing power to hyperscalers and artificial intelligence firms.
IREN Expands AI Cloud Revenue Targets
IREN (IREN) reported a significant shift in its business model, raising its 2026 AI cloud annualized run-rate revenue (ARR) target to more than $4 billion, up from $3.7 billion. According to the company, approximately 85% of this revenue is now secured under contract. The firm’s client list has expanded to include major industry players such as Microsoft, Nvidia, Perplexity, and Figure AI.
To manage the capital intensity of this expansion, IREN has implemented a payment structure where clients prepay 45% of GPU costs. Co-CEO Daniel Roberts noted that the company’s self-built AI cloud capacity is scaling rapidly, moving from 3 megawatts (MW) a year ago to a target of 480 MW for the current year. IREN aims to reach 1.2 gigawatts (GW) of capacity by 2027.
Did you know? IREN is becoming increasingly selective with its capacity allocations. Because demand from hyperscalers and AI developers currently outstrips available supply, the company is prioritizing contracts that offer the most favorable financial terms.
Hut 8 Secures $9.8 Billion Texas Data Center Lease
Hut 8 (HUT) announced a major expansion at its Beacon Point data center campus in Nueces County, Texas. A single tenant signed a 15-year, $9.8 billion lease for 352 MW of IT capacity, effectively doubling their footprint at the site to 704 MW. This transaction brings the total base value for the Beacon Point campus to $19.6 billion, with the potential to reach $50.2 billion if all renewal options are exercised.
The agreement is structured as a triple-net lease, which includes a 3% annual rent increase. Following this deal, Hut 8 reports a total of $26.6 billion in contracted base revenue across its entire AI data center portfolio. The company now manages 949 MW of IT capacity supported by 1,330 MW of utility capacity.
Market Response and Sector Performance
Investors responded positively to the infrastructure announcements, driving significant gains across the sector on Monday. IREN stock jumped nearly 20%, while Hut 8 shares rose 10.4%. Other industry participants also saw upward movement: Cipher Digital climbed almost 17%, CleanSpark rallied 11%, and Riot Platforms and MARA Holdings both gained 9%.
The market activity reflects a broader trend of data center providers shifting away from pure-play bitcoin mining to diversify into AI infrastructure. While Nebius (NBIS) pared some of its early gains to finish up less than 3%, analysts at Freedom Capital upgraded the stock to a buy, raising the price target to 200 from 150.
Pro Tip: When evaluating data center stocks, look for the distinction between “utility capacity” (total power available to the site) and “IT capacity” (the power actually usable for servers). Higher conversion rates often signal more efficient infrastructure management.
Frequently Asked Questions
What is a triple-net lease in data center contracts?
A triple-net lease requires the tenant to pay all property expenses—including real estate taxes, building insurance, and maintenance—in addition to rent. This structure provides the landlord, like Hut 8, with a more predictable revenue stream.
Why are bitcoin miners moving into AI cloud services?
Bitcoin miners possess specialized expertise in managing large-scale power infrastructure and cooling systems. By repurposing this capacity for AI developers and hyperscalers, these firms can tap into the high demand for GPU-based compute power, which often provides more consistent revenue than the volatility of bitcoin mining.
How does prepaying for GPU costs benefit a company like IREN?
Prepayments reduce the amount of up-front capital the provider needs to finance. By requiring clients to cover 45% of the hardware costs, IREN lowers its own debt burden and accelerates the deployment of new server capacity.
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