Investors looking to capitalize on the fast-evolving AI infrastructure market often face a choice between several promising companies, two of which are Iren and Applied Digital. Both organizations originated within the cryptocurrency mining industry and have recently shifted their focus toward artificial intelligence and high-performance computing solutions. Each company, however, has chosen a distinct path in this pivot, shaping different long-term investment propositions.
Tracing their origins, Iren established itself through the ownership and operation of extensive data centers dedicated to Bitcoin mining activities. Aware of the inherent economic volatility in this space, the company adopted a strategic shift toward AI data center services. This transition enables Iren to maintain operational flexibility, allowing it to alternate between cryptocurrency mining and AI computational demands based on market conditions and demand levels.
Financially, Iren has delivered a remarkable performance over the trailing year, with its stock appreciating more than 400%. Despite this surge, valuation metrics such as the forward price-to-earnings (P/E) ratio stand at a relatively high level of approximately 50, indicating the market's expectations of substantial future earnings growth. Additionally, the price-to-sales (P/S) ratio has progressively climbed, reaching about 20 as of January 27, demonstrating increased market valuation relative to the company's sales.
An indicator of Iren's successful strategic shift is evident in its recent contract achievements. The company secured a substantial $9.7 billion agreement to provide AI cloud services to Microsoft, underscoring confidence from a major technology player. Reflecting this momentum, net income figures have exhibited a significant turnaround — from a loss of $51.7 million in the first quarter of the previous fiscal year to a net income gain of $384.6 million in the first quarter of fiscal 2026.
In contrast, Applied Digital commenced similarly with a focus on cryptocurrency mining but has moved to develop and operate high-performance data centers tailored for large-scale computational demand. Unlike Iren's more flexible operational approach, Applied Digital centers its business model on providing long-term leases to customers with substantial computing needs. This strategy yields steadier and more predictable revenue streams, underpinned by long-duration contracts.
Applied Digital's market performance over the past year has been even more pronounced, with its stock witnessing an increase exceeding 500%. The latest quarterly financial results reveal substantial top-line growth, with revenues up by 250%, highlighting strong demand. The company’s ongoing revenue visibility is bolstered by multibillion-dollar leasing arrangements with prominent hyperscale cloud customers, including CoreWeave, alongside an impressive $16 billion backlog in pending contracts. These factors point to sustained revenue strength in the foreseeable future.
Choosing between Iren and Applied Digital as a long-term investment reflects an investor’s risk tolerance and preference regarding cash flow stability and growth potential. Applied Digital appeals to those prioritizing revenue predictability and contractual cash flow visibility, offering a more stable earnings profile by virtue of its leasing business model.
Conversely, Iren offers significant operational flexibility and potential upside driven by its dual exposure to crypto mining and AI data center services. However, this comes with increased volatility risks linked to the cyclical nature of cryptocurrency markets and the evolving landscape of AI computing demand.
Both companies experienced remarkable appreciation in their stock prices this past year, primarily fueled by market enthusiasm around AI infrastructure development. Nevertheless, investors should recognize that each carries substantial risk, with expected ongoing volatility as the AI spending environment continues to develop. Investing in either company requires a robust risk appetite and a long-term perspective. In summary, Applied Digital may be favored for its more secure cash flows, whereas Iren offers the possibility of greater gains accompanied by added risk.