𝐀𝐠𝐫𝐢𝐩𝐩𝐚 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬@Agrippa_Inv
$IREN price action post earnings release is nasty.
The market seems to be throwing a tantrum over 2 things: no new hyperscaler deals being announced, and a big miss versus analysts’ EPS expectations.
1) No new hyperscaler deal announcements is disappointing, but with the Sweetwater site being energized in just a couple of months, it’s clear to me that $IREN will sign a new deal at the latest by early Q2.
2) The EPS miss is irrelevant to me. All I care about is $IREN's future earnings power from its AI and HPC segment. $IREN's Q4 revenue still consisted primarily of mining operations, which should have been obvious to every analyst.
Meanwhile, the company is actively investing in its cloud division, which is pushing SG&A higher relative to revenue.
From a P&L perspective, there’s nothing I’m concerned about. I’ve done extensive modelling on the economics of $IREN's $MSFT deal (published to my subs) and concluded that $IREN should generate well over $100m per year in after tax net income from this partnership.
In fact, the deal looks even better today, with $IREN securing sub 6% interest on its GPU debt, which is incredibly impressive. The likes of $CRWV have a cost of debt closer to around 10%.
Overall, I’m still satisfied with what was announced. $IREN not only secured GPU financing at very low rates, but also announced a new 1.6 GW site in Oklahoma, making it their largest site to date.
$IREN's lead in secured power capacity continues to widen, and over time the value of that will become obvious, even if it may not feel that way today.
I’m now very much looking forward to the earnings call, which I’ll analyze in depth for my Substack subscribers over the coming days.
Don’t let your head hang. There’s still a lot to look forward to. Cheers! ✌️
