IREN stock surged over 20% this week due to two analyst upgrades and a significant contract with Microsoft. The company, transitioning from Bitcoin mining to AI cloud computing, has gained popularity among retail traders. Despite a $9.7 billion deal with Microsoft, IREN’s revenue from AI cloud services remains low at $7.3 million last quarter.

Analysts at Bernstein and H.C. Wainwright named IREN a top AI stock for 2026, leading to a surge in stock price. However, the company’s $16 billion market cap vastly exceeds its AI cloud revenue of $7.3 million, signaling a risky investment. Investors should carefully consider IREN’s potential for profitability in the future.

The Motley Fool Stock Advisor team did not include IREN among their top 10 stock recommendations, emphasizing the potential for significant returns from other stocks. With IREN trading at a premium to its AI cloud revenue, investors may want to explore alternative investment opportunities for better long-term growth.

Read more at Yahoo Finance: Why IREN Stock Soared More Than 20% This Week