Shares of Nebius' competitor surged following news of a contract with Anthropic

Shares of IREN, which provides cloud computing power for AI, rose 3.7% in premarket trading on October 12 following a report by the industry publication The Information. According to the publication’s sources, Anthropic, the developer of the large language model Claude, has entered into a multi-year agreement with the company.

Barron's speculates that Anthropic may well be the AI partner with whom IREN announced a contract back in August when it released its quarterly financial results. Representatives from both companies were unable to respond promptly to the publication's inquiries.

IREN competes in the cloud computing market with larger "neo-clouds" such as Nebius and CoreWeave. Their stock prices fell 2.3% and 1.8%, respectively, in premarket trading.

From the start of the year through the close on Friday, October 9, IREN shares had fallen about 7%, while the broad-market S&P 500 index had risen 14%. The company originally specialized in Bitcoin mining, but is now repurposing those facilities to provide AI companies with cloud computing power and supply their infrastructure with electricity. However, falling cryptocurrency prices and investor skepticism about the costly transition to the AI sector are putting pressure on the stock, according to Barron’s.

Last year, IREN signed a $9.7 billion agreement with Microsoft to provide cloud computing services, and in May, it reached a $3.4 billion agreement with Nvidia to deploy the company’s AI infrastructure in its data centers.

Wall Street views IREN’s prospects with optimism: 17 out of 22 analysts covering the stock recommend buying it, while the remaining five suggest holding it in a portfolio. The average price target is $80—which implies a 127% upside potential.

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