AI Energy Demand: Why IREN Could Lead the Next Bull Market

The Shift From Chips to Power Infrastructure

The artificial intelligence revolution has followed a predictable pattern: first, computing power becomes the bottleneck, and whoever solves it wins big. Nvidia demonstrated this perfectly—by cracking the chip challenge, the company became the first to reach a $5 trillion valuation and captured billions in annual revenue.

But here’s what’s changing: chips are no longer the primary constraint holding back AI deployment. Energy is.

AI workloads demand unprecedented amounts of electricity. Traditional data center infrastructure, designed for conventional computing tasks, simply can’t handle the power requirements of modern AI applications. This creates an enormous opportunity for companies that can deliver the energy infrastructure AI needs. Tech giants are already recognizing this shift, with companies like Alphabet paying $4.75 billion to acquire Intersect, an AI data center provider, demonstrating the capital being deployed to solve the energy puzzle.

Why IREN Stands Out in the Next Bull Market Prediction

Among emerging AI infrastructure players, IREN (NASDAQ: IREN) has positioned itself as a critical enabler. The company recently secured a landmark deal that illustrates the scale of opportunity ahead.

In November, IREN signed a five-year contract with Microsoft to provide 200 megawatts of power capacity for AI workloads. The deal structure is remarkable: valued at $9.7 billion over five years, it translates to nearly $2 billion in annual recurring revenue. Microsoft also prepaid 20% upfront, providing IREN with immediate capital to expand additional sites.

This isn’t a one-off win. IREN’s co-CEO Dan Roberts indicated in September that demand far exceeds current supply—the company literally cannot build data centers fast enough to meet market needs. With a multi-gigawatt pipeline of projects, IREN is positioned to announce additional Microsoft-scale contracts.

The Economics of Recurring Revenue at Scale

What makes IREN’s situation particularly compelling is the contract structure itself. Each major deal delivers multi-billion-dollar revenue streams with predictable, recurring payments. When IREN signs another contract similar to the Microsoft arrangement, the company’s annual revenue could jump by more than $1 billion instantly.

Few businesses operate at this scale of opportunity. Most companies must build revenue gradually; IREN can accelerate through discrete, enormous contracts.

Explosive Growth Trajectory in AI Cloud Infrastructure

IREN’s transformation from crypto mining to AI infrastructure reveals the magnitude of what’s ahead. Currently, crypto mining still drives most revenue, but the AI cloud segment tells the real story:

• Fiscal 2025 (ended June 30): AI cloud revenue reached $16.4 million
• Q1 Fiscal 2026 (ended Sept. 30): AI cloud revenue grew to $7.5 million quarterly
• Target by end of 2026: $3.4 billion in annualized AI cloud revenue run-rate

That projection represents a roughly 200x increase in less than 18 months. While ambitious, it’s supported by the Microsoft contract alone and IREN’s ability to deploy additional gigawatts of capacity. The company’s success hinges on execution—building data centers on schedule and fulfilling contracted megawatt commitments.

Why This Matters for the Next Investment Cycle

Energy infrastructure represents a genuine economic constraint with clear solutions commanding premium valuations. Unlike speculative bets, IREN’s revenue comes from binding agreements with Fortune 500 companies who desperately need capacity.

The pattern is clear: during AI’s first boom, semiconductor stocks dominated. The next wave belongs to infrastructure—specifically, companies solving the energy challenge. As more investors recognize that power, not processors, is the limiting factor constraining AI growth, stocks like IREN could experience the kind of acceleration seen in earlier infrastructure transitions.

The next bull market prediction points toward infrastructure providers. IREN, with its demonstrated contracts, gigawatt pipeline, and massive growth targets, represents one of the most intriguing opportunities in that category.