Iren (NASDAQ:IREN), a vertically integrated AI cloud and data center operator transitioning from Bitcoin mining, closed at $30.39, down 0.56%. The stock sank below $27 per share in early trading amid reports of pressure on AI infrastructure funding, following Gartner's warning that weighed on shares. Investors are watching AI cloud growth and capex commentary.
Trading volume reached 104.7 million shares, coming in about 134% above its three-month average of 44.8 million shares. Iren IPO'd in 2021 and has grown 24% since going public.
The S&P 500 (SNPINDEX:^GSPC) closed at 7,744, up 0.33%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 26,713, up 0.08%. AI cloud and Bitcoin mining infrastructure peer Core Scientific closed at $14.46, up 6.99%.
Research and advisory firm Gartner released a report yesterday that suggested over $3.5 trillion in AI infrastructure investments could be at risk of devaluation by the end of 2030 if AI providers maintain their current level of capital expenditure.
That warning drove shares of neocloud AI infrastructure companies lower, as large capital investments could falter. Iren stock touched a 52-week low based on those fears.
Gartner warned more than 80% of neocloud providers could cease current operations as independent businesses by 2030. Credit-market stress surrounding neocloud company CoreWeave's high-yield bond yields near 15% added pressure across AI infrastructure names.
Iren stock recovered early losses as investors may have realized the company has about half of its GPU capex funded through customer contract prepayments.
The reaction to the Gartner report should be based on a company-specific analysis rather than a sector wide move. That helps explain the stock's recovery today.
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Howard Smith has positions in Iren. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.