The analysis focuses on IREN Limited's strategic pivot from Bitcoin mining to AI Cloud services, catalyzed by a $9.7 billion multi-year GPU cloud services contract with Microsoft, which included a 20% upfront prepayment of approximately $1.95 billion. This prepayment has significantly bolstered IREN's cash position, improving its risk profile. Despite Q1 FY26 total revenue being $240.3 million, AI Cloud services contributed only $7.3 million, with Bitcoin mining comprising the majority at $232.9 million, signaling an early stage in the company's AI transition. IREN aims for an annualized run-rate revenue of $500 million by Q1 2026 and $3.4 billion by the end of 2026, backed by an expansion to 140,000 GPUs. The company's balance sheet reflects strong liquidity with over $1 billion in cash and minimal debt. However, the current valuation, with a Price/Sales ratio of 27.41x and Price/Book of 4.77x, is considered elevated, suggesting that future growth is already priced into the stock. Execution risk for the ambitious infrastructure build-out and GPU integration is a significant concern, as potential delays could incur financial penalties or contract termination. The Bitcoin mining segment continues to be a substantial cash generator, which could fund AI expansion without excessive dilution. Analyst ratings, while generally positive, show a slight decline in conviction, with a high price target of $136.00 indicating substantial upside potential, but also highlighting the wide dispersion in analyst expectations and inherent volatility.