IREN stock extended its sell-off, falling to its lowest level since August and mirroring the weakness across other neocloud names such as CoreWeave, Nebius, and Riot Platforms. The shares dropped to $21.75, well below their 2025 high of $76.63, as investors turned their attention to the upcoming earnings report.
IREN stock is falling as investors dump neocloud companies
Top neocloud companies are in a freefall, even as the S&P 500 and Nasdaq 100 indices jump after the recent midterm elections.CoreWeave, the biggest company in the industry, is dropping by nearly 10%. Nebius fell to $141, its lowest point since May this year.
Other companies like Riot Platforms, HIVE Digital, MARA Holdings, and Cipher Digital also plunged by double digits. The same happened with other companies like Nvidia, AMD, and Marvell Technology, which also dropped.
Investors are concerned about the Democratic sweep, which may lead to more scrutiny of the AI and data center industries. At the same time, investors remain concerned about the AI bubble, which some analysts believe will burst as interest rates rise.
A report released earlier on showed that the private sector added 86k jobs last month, higher than the expected 67k. As such, it is likely that the Fed will decide to hike rates in the December meeting.
In a recent report, Gartner showed that many neocloud companies will need to announce large impairments in the next few years. The report warned that AI data center owners will need to make $8.5 trillion in revenues through 2030. The total enterprise and consumer revenue in the AI space is expected to be less than $3.6 trillion.
IREN to publish its earnings report
The next important catalyst for IREN shares is the upcoming earnings, which will provide details of its business. Its last earnings report showed that its revenue dropped to $137.2 million in the fourth quarter. Notably, this report showed that its AI cloud services revenue rose to $70.2 million, while its Bitcoin mining figure fell to $66.7 million.
The upcoming earnings report is expected to show that its revenue dropped by 9.13% to $221 million. Its guidance for the current financial year is expected to show that its revenue will come in at $2.81 billion, up by 297% from a year earlier. It is then expected to jump to $7.41 billion next year.
IREN will likely need to explain whether it is in talks with other large customers. The company relies on one anchor client, which agreed to pay it $9.3 billion. This year, it has not announced any major new deals, in contrast to the $2.8 billion in agreements it disclosed with companies such as Cohere and Figure AI.
IREN stock has formed a head & shoulders pattern
IREN chart | Source: TradingView
The daily chart shows that the IREN shares have fallen in the past few months. It has already dropped below the important support level of $33.34, the neckline of the head-and-shoulders pattern. This pattern is one of the most common bearish signs in technical analysis.
The stock has dropped below the 61.8% Fibonacci Retracement level of $33.3. It has remained below the Supertrend indicator. Therefore, these technicals suggest that it has more downside, potentially to the psychological level of $20.
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