The $20B Question: Why Iren's Growth Pipeline Could Reshape the AI Data Center Landscape

When it comes to AI infrastructure plays, Vertiv has dominated investor attention with its impressive track record—up 39% annually and more than 550% over five years. But beneath the surface, a more compelling growth story is unfolding with a much smaller competitor that’s already caught the market’s eye.

How Iren Moved From Underdog to Potential AI Giant

Iren’s trajectory tells a different story. While its market cap sits at just $12 billion compared to Vertiv’s $67 billion, the company has already quadrupled its stock price in the past year—and the real momentum may just be beginning.

The catalyst? A landmark five-year partnership with Microsoft worth $9.7 billion. Under this agreement, Iren supplies 200 megawatts of power to Microsoft’s data center operations, translating to roughly $2 billion annually. Critically, Iren negotiated a 20% prepayment clause, which effectively funds expansion without burdening the balance sheet with excessive debt or shareholder dilution.

Here’s where the math gets interesting: Iren currently has approximately 3 gigawatts of power capacity in its pipeline. If the company secures 14 additional contracts matching the Microsoft deal’s scale, it could theoretically generate $20 billion in annual recurring revenue within five to ten years.

The Revenue Acceleration Narrative

Management’s own projections support this ambitious target. Iren is guiding for $3.4 billion in annual recurring revenue by end of 2026—a significant jump from the $16.4 million achieved in fiscal 2025. The Microsoft deal essentially accelerated this timeline, putting the company ahead of previous guidance that had targeted $200-250 million for December 2025 alone.

This isn’t just revenue growth; it’s recurring, predictable revenue from long-term enterprise contracts. For investors seeking exposure to AI infrastructure with explosive growth potential, that matters enormously.

The Vertiv Reality Check

Vertiv remains a solid business. Its 29% year-over-year revenue growth in Q3 is nothing to dismiss, and liquid cooling solutions will remain essential as AI compute expands. However, management guidance for Q4—18% to 22% year-over-year growth—suggests the acceleration may be moderating.

With a $67 billion market cap, Vertiv is also significantly larger, meaning even strong growth translates into smaller percentage gains. Moving a $12 billion market cap company requires far less capital momentum than moving one valued at $67 billion.

Size, Growth, and Capital Efficiency

The market cap differential underscores a fundamental truth: smaller AI infrastructure companies operating with explosive revenue growth often deliver outsized returns. Iren’s pipeline—with the Microsoft contract serving as proof of concept—demonstrates that enterprises will commit significant capital to secure reliable data center power.

The combination of a demonstrably large TAM (total addressable market), proven enterprise demand, manageable market cap, and recurring revenue visibility creates a compelling asymmetric opportunity for growth-focused investors.

Whether Iren can execute on these ambitions remains the critical question. But based on current trajectory and the Microsoft validation, the company has transformed from a smaller competitor into a legitimate contender in the AI infrastructure space.