IREN Limited shares have surged 370.6% in the past six months, outperforming the Finance sector and Financial – Miscellaneous Services industry. However, this rapid growth comes with significant capex obligations that could strain future profitability. The company’s expansion into AI cloud and HPC markets also poses execution risks and increased competition.

IREN’s long-term profitability is at risk due to high capex requirements for AI cloud expansion. The Microsoft deal alone requires $5.8 billion in GPU capex, with additional financing needed. The company’s entry into AI and HPC markets adds operational risk, and competition from peers like Applied Digital and TeraWulf is growing.

Despite its impressive rally, IREN faces challenges in the near term. High capex commitments, execution risks, and competition from peers make the stock a risky bet. Earnings estimates show uncertainty, with downward revisions for fiscal 2026. Investors may want to stay away from this Zacks Rank #5 (Strong Sell) stock for now.

Artificial intelligence and quantum computing convergence could offer significant investment opportunities. Positioning your portfolio in quantum computing stocks could lead to substantial gains. Learn more about the potential winners in the quantum computing race and how to benefit from this technological revolution.

Read more at Nasdaq: IREN Limited Soars 371% in 6 Months: Buy, Sell or Hold the Stock?