Will AI cloud services exceed 30% of IREN's total revenue in Q4 FY26 (Apr-Jun 2026)?

Q4 FY26 (April-June 2026) overlaps with the Sweetwater energization target. For AI revenue to exceed 30% of total, two things must happen: (1) AI revenue must grow dramatically from ~$11M/quarter, and (2) the denominator (total revenue) must not grow proportionally from mining. Even if Sweetwater energizes early in Q2 and some Microsoft revenue begins flowing, the ramp from near-zero to >30% share requires significant scale in one quarter. The revenue recognition timeline (deploy GPUs → test → integrate → recognize) adds lag. More likely that Q4 FY26 sees initial AI revenue growth to perhaps $20-40M, with mining still dominant. 30% share would require ~$55M AI if total stays at $185M, or ~$45M if mining declines to $105M total. Either way, this is a dramatic ramp.

The math is challenging. Current AI revenue: ~$11M/quarter. Current total: ~$185M. For AI >30%: if total stays flat, need $55.5M AI revenue. If mining drops to $120M and AI reaches $55M, total = $175M and AI share = 31%. But reaching $55M in AI revenue in Q4 FY26 requires deploying thousands of GPUs at Sweetwater AND having them generating recognized revenue by quarter end. Given Sweetwater energization is ~42% likely by June 30, and there's a multi-week lag to deployment and revenue, the window for meaningful Q4 FY26 AI revenue from Sweetwater is narrow even in the success scenario.

There is a denominator-driven path to YES: if Bitcoin mining revenue collapses (e.g., BTC price crash) to $60-70M while AI revenue grows to $30-35M, AI share could reach 30%+ with total revenue of ~$100M. This scenario is plausible because mining revenue is exposed to Bitcoin price volatility AND deliberate hashrate reduction for AI conversion. However, this 'success' path represents a worse outcome for the company overall (lower total revenue). The numerator-driven path (AI revenue exploding to $55M+) is less likely given infrastructure constraints.

The 30% threshold is aggressive for Q4 FY26. AI cloud revenue is ~$11M/quarter today. Even if Sweetwater energizes on time and Microsoft workloads begin, the ramp curve from zero to meaningful revenue at a new facility takes months. Q4 FY26 might see early Microsoft revenue ($10-25M?) plus growing Prince George revenue ($15-20M?), totaling $25-45M in AI. With mining potentially declining to $120-150M, total could be $145-195M. The 30% threshold requires AI to be a much larger share than is likely in this first ramp quarter.

Even in the most optimistic Sweetwater scenario (energization in April, immediate GPU deployment, Microsoft workloads by May), the first quarter of revenue will be partial (not a full quarter of operations). Revenue recognition also requires meeting Microsoft's SLA requirements, which means testing and validation before revenue flows. A more realistic AI revenue estimate for Q4 FY26 is $20-35M — impressive growth from $11M but not enough to reach 30% of total. Mining would need to collapse to ~$50M for the share to work, which is a 71% decline from current levels in 2 quarters.

The base case for Q4 FY26 is: AI revenue growing to $20-40M (driven by Prince George expansion + initial Sweetwater Microsoft revenue), mining declining to $100-140M. This puts AI share at roughly 12-25% — meaningfully higher than 6% but still below the 30% threshold. The 30% target is more likely achievable in Q1-Q2 FY27 (July-December 2026) when Sweetwater is fully ramped. Q4 FY26 is too early in the ramp to clear 30%.

30% AI share requires dramatic shift from current 6%. Even with Sweetwater on time, first-quarter ramp is partial. Mining likely still dominant in Q4 FY26. More realistic AI share: 15-25%. Threshold too aggressive for this timeline.

The path to 30% requires either massive AI revenue growth (5x in 2 quarters from new infrastructure) or mining revenue collapse. Neither is the base case for Q4 FY26. Mining decline is gradual (23% QoQ, not 50%+), and AI ramp starts slow at new facilities. Strong conviction this resolves NO for Q4 FY26.

Q4 FY26 is the transition quarter. Some Microsoft revenue may begin but at partial-quarter levels. Mining still dominant. AI share likely 15-25% in optimistic scenario. 30% requires either perfect Sweetwater execution + immediate full ramp (unlikely) or mining crash (possible but not base case). Below 25% probability.