Earl retweeted
This AI infrastructure drawdown reminds me of the SPAC bobble.
2021–2022: the SPAC bubble popped. ~90% of those companies were overpriced garbage, and the market didn’t bother separating them. Everything with the SPAC label got sold. Beating estimates didn’t matter. Raising guidance didn’t matter.
$HIMS is the best example. In May 2022 I was buying heavy at $3, and I earned alot of money on that drawdown:
• ~$620M market cap, 200m in cash, no debt
• Q1 revenue +94% YoY, crossing $100M in a quarter for the first time
• Full-year guidance raised to $410–425M
• 74% gross margins, adj. EBITDA almost breakeven
1x forward sales for a company growing 90%, and the market priced it like it was going to zero. It went on to hit $68. Over 20x from the bottom.
Today AI infra is getting the same treatment. AI bubble fear + fear of capital raises = everything with “AI” in the name gets sold. The good, the bad and the garbage, all in the same bucket.
$IREN: $76 ATH → $24. ~50% down in the last month alone.
What you’re getting at $24:
• <$10B market cap
• $7.6B cash on the balance sheet
• ~$14B in cash + committed GPU financing + customer prepayments
• $4B ARR already contracted for 2026 capacity
• New 3-year contracts priced at >$23M per MW
My 2027 revenue targets:
$6.4B revenue in 2027
$16.55B exit ARR after SW1 and H5-6 delievery in Q3/Q4.
That’s ~1.5x 2027 revenue and ~0.6x exit ARR at today’s market cap.
And the YoY growth numbers will be astonishing for 2027 (estimates):
Q1 ‘27: $145M → $1.1B (+660%)
Q2 ‘27: $137M → $1.3B (+850%)
Q3 ‘27: ~$220M → $2B (~+810%)
Q4 ‘27: ~$550M → $3,5B (~+535%)
Revenue growing 5–9x YoY, and the market is pricing it like a broken bitcoin miner.
Is it risk-free? No.
• FY27 capex is guided at $25–30B, so more financing is coming. (Missing 3-8B)
• Dilution is a real risk
• Any delay on Horizon or Sweetwater pushes the ramp out
• ARR ≠ recognized revenue
But right now the market isn’t pricing IREN on contracts, capacity or cash. It’s pricing it on sentiment.
When the tide goes out, the garbage gets exposed and the real businesses get re-rated. HIMS bottomed at ~1x forward sales and came out of the SPAC crash a winner. IREN is at ~1.5x my 2027 revenue, and I think it comes out of this one the same way. There are more risks with Iren compared to my Hims holding, but atm I believe alot of the risks are priced in. And alot can go wrong and the stock will still be undervalued.
Not financial advice. I’m long $IREN at 24$.
Earl retweeted
More power for Mackenzie!🔥
Every 25MW with 25m/MW is more profitable then the whole 200MW MSFT deal👀
$IREN
🚨BREAKING NEWS🚨 10/24 footage confirms massive expansion is underway at $IREN's Mackenzie site in BC.
Will @danroberts0101 discuss this on the 11/5 earnings call?
More details to come!
Earl retweeted
🚨BREAKING NEWS🚨 10/24 footage confirms massive expansion is underway at $IREN's Mackenzie site in BC.
Will @danroberts0101 discuss this on the 11/5 earnings call?
More details to come!
Earl retweeted
$MSFT signed one deal with $IREN back in November.
Worth $9.7B over five years.
The whole company was worth $9.81B at Friday’s close.
One customer is basically the entire valuation.
The market is pricing it like the deal barely exists.
Two prices for $IREN , and they're nowhere near each other.
In May, $NVDA signed for the right to buy in at 70 a share.
Up to 30 million shares over five years.
Friday's close was $24.91.
That's 64% below the price they signed for.
Either that price was a fantasy, or this selloff went too far.
November 5 will tell us. I hold it, so I'll be watching.
Earl retweeted
🚨 $IREN HAS TWO POTENTIAL SCENARIOS AND ITS APPROACHING #1...
This stock is almost forming a PERFECT Bull Flag if you ask me... and right now, it is approaching my first POI.
$IREN could bounce hard off this daily overnight gap (also aligns with lower trendline).
Or, it could break and hopefully find support at the multi-year support level below $18.
Nonetheless, I remain long-term bullish on $IREN.
Below $18 is serious discount.
Earl retweeted
A lot of questions this week on funding, so here's how a GPU typically gets funded at $IREN.
First, the customer signs a multi-year take-or-pay contract and agrees to a prepayment. On our recent 3-year contracts, prepayments have been 45% to 55% of the associated GPU capex.
Second, financing is committed, secured by the contracted GPUs. On the Microsoft contract we secured an A-rated facility at around 6%, which together with prepayments covers 96% of GPU capex. More recently, for a non-investment grade counterparty at Mackenzie, we secured financing at 9% fixed, which together with prepayments covers more than the full cost of the GPUs.
That's the GPU side. The data centers are a separate, long-term asset base, and we own the ones our GPUs run in. Construction has been funded from cash to date, with no debt against these multi-billion dollar assets. As they come online with contracted customers, they can support financing in their own right.
The processes behind the next facilities are continuing, and new paper will cost what the market charges. With GPU paybacks of around two years on our recent 3-year contracts, a wider spread barely moves the economics.
There's more customer demand than we can build for. As we noted at our recent earnings, 2026 is largely sold out, recent 3-year contracts are at more than double the prior year's pricing, and demand for anything we can bring online in 2027 covers it several times over, with prepayments a focus in every negotiation. Conversations on 2028 capacity are already underway.
Meanwhile announced capacity keeps slipping across the industry, which is the point: signing deals isn't the bottleneck in this market, bringing GPUs online is, and that's our focus.
Earl retweeted
$IREN Status of H2
Timelines
From two separate sources, one is a 2nd degree source and the other is a 3rd degree source, MSFT is requesting changes to H1's networking topology. By extension, this topology will be need to be cabled for H2-4. The re-cabling on H2 was given a timeline of 45 days while H1 will be re-cabled while running workloads aka billing and that process was given a timeline of 4 months. H3 will be delivered with H4 as a supercluster, H4 hasn't begun cabling and will maintain December timeline.
H1 recabling will take much longer than H2 because H1 is already accepted so the changes will be made during maintenance window in stages. H1 will be running live workloads and billing.
I'm not sure when the 45 days started but H2 will be delivered either late Nov or Early Dec.
Both H3 and H4 will be delivered as a super cluster Dec.
What's the Issue
This request comes after acceptance test while running workloads on H1 but before the supercluster networking before H1 and H2. The issue was described as networking bandwidth between racks within a scaleable unit. All of H1 counts 1 scalable unit.
Networking physical distances are not as sensitive as Cray supercomputer days and spec is around 50 meters. This is important because it means that racks will not need to be moved, aka no changes to liquid cooling pipes or power distribution components.
Cabling does take a long time because there are literally hundreds of thousands of cables that need to carefully cabled as wrong cable will take more time debugging than getting it right in the first place. The cabling team used for H1-4 too. However, internally the deadline is still 2026.
Who is at Fault
MSFT is a very large company with multiple team. Their bare metal team signed off because IREN met Nvidia DSX specs. However MSFT platform team when deploying software need a specific topology for their workload and was not communicated to the bare metal team. This explanation is based on the fact that this was not a test case in acceptance testing and found more than 1 month after acceptance and usage began. During this one month, it's likely that platform team deployed and only now did MSFT's AI research team started running workloads.
Between IREN, Dell, MSFT - it's most likely MSFT's platform team did not gather requirements from MSFT's research team and did not relay the full requirements to MSFT's bare metal team. Dell is paid for cabling based on MSFT specs.
And no, there cannot be one huge stress test to have maximized traffic between every rack within the SU because the networking bandwidth is maximized for workload traffic patterns. Every rack pair cannot simultaneously get each rack’s full bandwidth. Different topology maximizes for different workloads. IREN's supercluster topology is most likely rail-optimized, non blocking fat-tree.
Earl retweeted
Know what you own.
Flushes like this are not by choice.
Decade long data centers are not weekly investments.
Stay strong frens.
$IREN
Earl retweeted
$IREN's debt situation is under full control, and very managable, this is not robinhood:0x5f10a1c971b69e47e059e1dc91901b59b3fb49c3!
Iren has 7,7B in total interest bearing debt today (last reported). Their average rate on this debt is 1,5%!
So they pay 116m every year on this debt, or 29m per quarter. Iren also has 5,9B in cash on hand + 1,7B in restriced cash.
Their comitted GPU debt (drawn as GPUs are delivered):
MSFT senior debt (HS)= 3,65B at 6% blended (2,1B fixed at 5,96% + 1,55B floating, hedged)
Blue Owl debt (AI labs) = 2,4B at 9% fixed rate. Unknown debt not disclosed = 400m at 9%?
=So in total (6,45B @ 7,30%) ~471m per year once fully drawn.
CONVERTIBLE NOTES:
2029: 233m @ 3,50% (conv. price $13,64)
2030: 212m @ 3,25% (conv. price $16,81)
2031: 1,0B @ 0,00% (conv. price $85,63)
2032: 1,15B @ 0,25% (conv. price $51,40)
2033 Jun: 1,15B @ 1,00% (conv. price $51,40)
2033 Dec: 3,0B @ 1,00% (conv. price $73,07)
= So in total 6,75B @ 0,88% avg coupon =59m every year, or ~15m per quarter.
=All committed debt fully drawn: 13,2B @ ~4,0% → ~530m per year, or 132,5m per quarter.
Very manageable for $IREN when their revenue becomes >1B in CY Q1 2027.
Earl retweeted
All the $IREN bulls today after the stock went from down 5.5% to up 0.07%
