Iris Energy (IREN) Slashed to $24 by JPMorgan - 48% Downside, Shares Drop ~7% Pre-Market

Iris Energy (NASDAQ:IREN) tumbled roughly 7% in pre-market trade after JPMorgan analyst Reginald Smith cut the stock from Neutral to Underweight and slapped on a $24 price target.

That $24 target sits about 48% below Thursday's close of $46.29, so the downgrade wasn't subtle. Smith praised Iris's core strengths - attractive power contracts, an efficient mining fleet and its standing as a sizable bitcoin-mining operator - but argued the current share price looks like it's already assuming a mega-scale data-center win.

Specifically, JPMorgan flagged market expectations that Iris will land a colocation agreement north of 1 GW in size. Pulling that off would be extraordinary - think record-setting deal, capex well into the billions (JPMorgan pegged potential capex above $10 billion) - and Smith says that kind of assumption creates more downside than upside at today's levels.

Iris's growth plans are concrete on paper: a Cloud Services push with about 23,300 GPUs intended to be fully energized by Q1 2026, a 1.4 GW site slated for April 2026 and the initial 75 MW HPC data center, Horizon 1, in the process of being energized. Those are the building blocks behind the optimism. JPMorgan, however, is skeptical that the market's enthusiasm for a massive colocation outcome is priced appropriately.

In plain terms: the firm acknowledged the operational positives but argues the stock price seems to factor in an almost mythical expansion. The market's early reaction was immediate; shares slipped in pre-market trade following the note.

Iris Energy builds, owns and runs data centers and power infrastructure - largely driven by renewable energy - focused on bitcoin mining and high-performance computing. Whether the company can close the gap between project roadmaps and the outsized expectations embedded in the share price is the open question.

So here's the punchline: $24 is the new baseline from JPMorgan. Will the company prove that a >1 GW colocation is realistic, or will the price adjust to something more conservative?