IREN shares surged following a $1.6 billion agreement with Dell to bolster its AI cloud operations. This deal is expected to elevate projected annual revenue to $4.4 billion by 2027.

What to know:

— The company has finalized a $1.6 billion purchase agreement with Dell for air-cooled Blackwell systems, which will support its long-term AI cloud services contract.

— These systems will be installed at IREN’s facilities in Childress, Texas, enhancing its capacity to cater to the rising demand for AI computing power.

— Once operational, the AI cloud contract is anticipated to raise IREN’s annualized revenue from $3.7 billion to $4.4 billion.

IREN’s stock climbed 4% in pre-market trading after the announcement of a $1.6 billion purchase agreement with Dell Technologies for air-cooled Blackwell systems, marking a significant advancement in expanding its artificial intelligence infrastructure, the company reported on Wednesday.

The new systems will back IREN’s previously disclosed five-year, $3.4 billion managed services AI cloud contract and are expected to be deployed throughout the company’s existing data centers in Childress, Texas. The commissioning is aimed for early 2027.

Once the systems are operational, the AI cloud contract is projected to boost IREN’s annualized run-rate revenue from $3.7 billion to $4.4 billion, solidifying the company’s role as a growing entity in AI infrastructure and cloud services.

Co-founder Daniel Roberts emphasized the importance of speed and execution in the rapidly evolving AI landscape.

“Securing capacity and accelerating commissioning are our top priorities in a market where time-to-compute is everything,” Roberts remarked. “Our partnership with Dell guarantees access to hardware at the scale and speed the market demands.”

This agreement underscores the escalating need for AI computing capacity as hyperscalers, businesses, and developers strive to obtain infrastructure for next-generation AI workloads.