IREN Falls 5% After Friday’s 20% Surge as AI Lending Worries Mount; TeraWulf and Applied Digital Rise 2%

Friday’s big rally in IREN (NASDAQ:IREN) is partly fading as fresh worries about lending to AI data center builders spread through the former crypto miners. IREN stock is at $20.60, down 5% as the session gets underway. That decline follows a 20% jump in Friday’s trading session; that rally had carried IREN to a $21.64 close.

Profit taking after a run that steep looks like the main force behind IREN’s slide, with financing jitters adding to the pressure. Two of the company’s closest peers in AI hosting are rising instead, which sets up a clear split inside the group. These moves are early readings and can reverse as more volume comes in.

Lenders Grow Choosy on AI Data Center Debt

Neocloud stocks, which rent out graphics processing unit (GPU) capacity for AI work, are sliding after a Reuters report in focus on November 9 found that banks are becoming more reluctant to finance expensive data center projects. Lenders pointed to last week’s tech sell-off and Democratic midterm wins, and they’re now reviewing borrowers’ cash flow, completion deadlines and customer cancellation provisions. That scrutiny hits IREN directly, since the company reported $4.43 billion of net debt at the end of its latest quarter.

IREN’s Q1 FY2027 revenue of $228 million beat expectations when the company reported November 5, and its backlog reached $20.3 billion. However, management pushed its goal of more than $4 billion in operating annualized recurring revenue (ARR) to January and said it could run to the end of February. Management also disclosed $6 billion of the company’s remaining planned capital spending still has to be funded.

Co-CEO Daniel Roberts acknowledged the tougher conditions on the earnings call, noting that “the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed and run at a profit.” JPMorgan Chase cut its price target on IREN on November 9, citing reduced capital spending and delays.

TeraWulf and Applied Digital Move Apart From IREN

Against the same lending headlines, TeraWulf (NASDAQ:WULF) is moving higher. Specifically, TeraWulf stock is at $11.58, up 2%. A similar gain is showing up with Applied Digital (NASDAQ:APLD) stock, which is trading at $15.79, up 2%.

Both of IREN’s peers face the same lender scrutiny, so their gains stand out against its slide. Weakness is spreading to Cipher Digital (NASDAQ:CIFR), another name in the AI hosting group. Cipher Digital stock is at $6.37, down 3%.

Among neoclouds that lean heavily on debt financing, CoreWeave (NASDAQ:CRWV) sits alongside IREN. CoreWeave stock is trading at $46.27, down 0.3%.

How IREN’s Business Differs From TeraWulf and Applied Digital

IREN owns its land, power and data centers, and it also buys the GPUs that it rents to customers through its AI Cloud business. That setup puts chip spending on IREN’s balance sheet on top of construction costs, which explains why its funding needs run greater than a pure landlord’s.

TeraWulf leases capacity to tenants under long-duration contracts and doesn’t own the GPUs inside its buildings. Management framed its priorities on the November 6 call, stating that “Growth only matters if it creates cash flow and equity value for our shareholders.”

Applied Digital builds large campuses for hyperscalers under long-term take-or-pay leases and has said it’s growing more selective about customer credit quality. The company’s management believes leases with investment-grade tenants give it access to a broader range of financing options.

IREN’s January Milestone Sets Up Its Next Test

IREN now faces the question of whether its delayed ARR milestone lands in January as planned. Management has said that two-thirds of the backlog sits with investment-grade counterparties, and new contracts include large customer prepayments. Roberts added that the company has cut its planned spending to respect tighter markets, stating, “We have deliberately flexed it down.”

Tighter lending works against IREN, since the company still needs fresh capital to close its funding gap. An investigation at NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) into its chief executive, reported on November 8, adds uncertainty for operators that rely on its processors. At the same time, mega-cap tech stocks are rallying, a sign that broad risk appetite hasn’t disappeared. Suppliers of power, cooling, and networking gear behind the data center expansion tell their own version of this story, and we pulled seven of them into a free report on the AI infrastructure trade.

A clean January delivery could ease some of the pressure on IREN, while another delay might feed the lending worries. IREN’s funding gap could remain a key focus for investors until it settles.

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