IREN Ltd (IREN US) $US11.54

Sydney based, US-listed IREN Ltd (IREN US), formerly known as Iris Energy, has come up several times in Q&A’s, and we like the story. While at the smaller end of our universe for the International Equities Portfolio, we like it here and are likely to take a small position, to establish a foothold and build our conviction from there.

At its core, IREN is using earnings from bitcoin mining to build out next-generation data centres powered entirely by renewable energy. This $US2.1bn business are now at an inflexion point in earnings. At their last update in May, they said their Bitcoin mining operation had its best month on record, and they are making strong progress across their AI verticals. Monthly revenue of $US64.7m came primarily from Bitcoin mining, and they are on track to almost double the $25m profit they booked last quarter in 1Q26 (consensus $47m profit this quarter). As a side note for those interested, it costs them about $US27k in energy to mine one Bitcoin. For those not familiar what Bitcoin mining actually is, here is a very quick summary:

Bitcoin mining is like a big competition to solve math puzzles;

1. The goal: People (called miners) try to solve a complex math problem using computers. The first one to solve it gets to add a new “block” of transactions to the Bitcoin network—a bit like adding a page to a digital ledger.
2. The reward: The miner who solves the problem gets paid in new bitcoins. This is how new bitcoins are created.
3. Why it’s important: Mining helps keep the Bitcoin network running safely. It checks and records all the Bitcoin transactions, making sure no one cheats by spending the same bitcoin twice.
4. The catch: It takes a lot of electricity and powerful computers to mine Bitcoin.

So in short: Bitcoin mining is how new bitcoins are made and how the network stays secure—by solving hard problems with computers.

IREN are funnelling these funds into a data centre roll-out strategy that is also progressing at pace. Obviously, this is a complex area and we’re not Bitcoin mining experts, which makes us somewhat cautious, however, on a review of their historical numbers and forecasts, which are supported by decent analyst coverage (12 analysts cover IREN), consensus earnings have some validity and foundation, and the direction of the business is impressive. They have no debt, can fund their expansion plans, and have been executing well.

• Recent price action is bullish, and while this is clearly a higher risk stock given the nature of the business, if they continue to execute, we believe they are worth well north of the current $US11 share price., On 20x consensus earnings for FY26, we think they are worth ~$US19.