IREN (IREN US) $US34.28

We added IREN to the portfolio last week at a small 3% weighting, and the early result has been poor, with the stock falling around 16% since. Clearly not the start we were after, though this is the reality of owning a high-beta name with strong leverage to Bitcoin and plenty of market noise around the AI/data centre thematic. Importantly, while the price action has been ugly, we don’t think the underlying thesis has changed, which we covered in more detail in a note last week – Here.

IREN still strikes us as one of the cleaner listed ways to back both Bitcoin strength and rising demand for data centre infrastructure. The attraction is in the simplicity of the model: low-cost power, scalable assets, and meaningful operating leverage when Bitcoin is working in its favour. In FY25, net electricity cost per Bitcoin mined was US$25.6k, while broader cash mining costs were around US$28.7k/BTC. Those numbers moved higher in Q1 FY26, but the key point remains intact – this is a relatively lean business where the economics are driven primarily by power costs, not a bloated operating base.

The challenge in the short term is that sentiment towards the broader mining complex has deteriorated. Margins have tightened due to higher power costs, funding conditions have become tougher, and the market is increasingly questioning whether some operators will need to sell Bitcoin, raise fresh capital, or accelerate a pivot towards AI and data centres to support growth. That change in mood has weighed on the whole space, and IREN has not been immune.

However, as we flagged last week, IREN is no longer simply a Bitcoin miner. The company is building meaningful exposure to AI and data centres, which provides a second leg to the growth story and, importantly, another way for the market to value the business over time. It doesn’t remove the volatility, but it does give IREN a strategic edge that many of its peers don’t have.

• We didn’t buy IREN expecting a smooth ride. We bought it because the upside can be significant if Bitcoin stabilises and management continues to execute on the broader infrastructure opportunity. The stock is volatile, and our timing has clearly been poor, but at this stage we see this as painful price action rather than a broken thesis.