I'm glad I waited until early October to get started. So now I have a 4.8% and 3.4% $IREN (+4,43%) ...

$IREN (+4,43%)

Last week's Neocloud crash has $CRWV (-0,34%), $NBIS (+0,99%) and $IREN (+4,43%) sent it into a tailspin. What’s behind this, and what has actually changed for the future?

It all starts with the price of oil

Since the attacks on Iran, the price of oil has risen from ~$80 in August to over $106 per barrel. This is having a major impact on U.S. inflation:

• Consumer Price Index (CPI): 3.7% in September, compared to an expected 3.6%. That’s nearly double the Fed’s 2% target
• Core inflation: 2.6%, also above expectations
• Producer prices (PPI): 6.3% year-over-year, more than three times the Fed’s target. Month-over-month: +1.3%, nearly double the expected increase and the sharpest rise since March 2022

The Fed raised interest rates on September 16 for the first time since 2023 raised interest ratesto 3.75–4.00%. The yield on 10-year U.S. Treasury bonds stood at over 5.2% at the end of September, the highest it has been since 2007. Added to this is a U.S. government that is sinking deeper and deeper into debt and must continually issue new bonds.

This is precisely where the problem with Neoclouds lies: The expansion of AI is largely financed by debt and competes for the same investors as the U.S. government. If a government bond yields over 5% with almost no risk, lenders will demand significantly more from a company that is still operating at a loss.

The trigger for the crash: CoreWeave’s bonds

On October 14, a chart went viral showing a CoreWeave bond worth $1.25 billion with a yield of just under 15% . It was issued in June at 9.625%. The credit default swap (CDS) is at a record high of 1,194.5 basis points; on October 6, it was still at 368.

According to standard calculations, this corresponds to a probability of default of over 60% within five years.

On the same day, Gartner added: By 2030, over 80% of Neocloud providers are expected to lose their independence. By then, AI data centers would generate at most $3.6 trillion in revenue, whereas $8.5 trillion would be needed.

Is this fear justified?

In CoreWeave’s case, partly yes. The higher market yield doesn’t affect the interest rate on existing bonds, but each new round of financing becomes more expensive, and CoreWeave’s growth depends on new loans. However, the 60% figure is a market price from a week of panic and not a forecast.

IREN and Nebius are in a different position

IREN has financed the Microsoft project $MSFT (+1,32%) at ~6% with $3.6 billion. Microsoft accepted Horizon 1 in August, and revenue has been generated since then. Horizon 2 through 4 are scheduled to follow in the fourth quarter; contractually, there is a buffer until early Q2 2027.

Information is currently circulating on X that Microsoft $IREN (+4,43%) is said to have provided incorrect network requirements, forcing the current Childress data centers to be have to be . Horizon 2 is reportedly delayed by ~45 days as a result; Horizon 1 will continue to operate and will continue to be paid for by Microsoft during the retrofit. Horizon 3 & 4 are not expected to be affected, as they will be completed directly with the correct network specifications. Thus, all four buildings are expected to generate revenue by the end of the year as planned. None of this has been officially confirmed.

In July, Nebius switched to a more capital-efficient model in which partners finance the data centers. In addition, advance payments from customers already amount to ~40–55% of the contract total, which alleviates a large portion of Neocloud’s financing risk. Added to this is the possibility of asset-backed financing, whereby the data centers themselves can be used as collateral for loans, thereby reducing interest rates. Nevertheless, the market treats the three companies—with their differing financing risks—as a single entity.

Demand points in the opposite direction

The GPU rental prices are rising: As of October 1, Nebius raised the price for B300 GPUs by 21% to $9.50 per hour—the second increase in three months.

The DESKB300 Rental Index, based on actual rental transactions at U.S. neoclouds, reached a record high in mid-October, driven in part by inference using open-source models. This does not bode well for concerns that GPUs are depreciating too quickly.

GPU rental prices could also be influenced by rising financing costs and thus increase—so overall, this is more of a neutral process.

Jensen Huang told Bloomberg in Berlin on October 16: “All of this is going to pass.” AI will transform every industry, he said, and we’re only at the beginning. According to Huang, CoreWeave’s cost of capital is actually falling. The bond market saw things differently this week.

Time is the real bottleneck

A data center isn’t built in a single quarter. Securing land and a power connection often takes years, and the construction itself is complex. Neocloud stocks are bets on where these companies will be in three to five years, but they’re traded as if they had to deliver every week.

Even with growing demand, not all of them will make it. Some will repeatedly dilute their shareholders, some will be acquired, and some will fail.

What matters is how management finances the expansion and whether it delivers on its promises.

Sharp sell-offs, months of stagnation, and rallies after which everyone suddenly turns bullish again are all part of this sector and should be clear to every investor. A five-year thesis is difficult to gauge based on year-to-date performance.

Overall, the market is pricing in a financing problem—one that is particularly acute for CoreWeave—and applying it to the entire sector. At the same time, demand for computing power shows no signs of weakness—quite the opposite.

High long-term interest rates are the main risk for all players

If government bond yields remain above 5% for the long term, every new round of financing will become more expensive, and that affects all three companies. CoreWeave, Nebius, and IREN are only at the beginning of their expansion and will need to raise many billions more for data centers and GPUs in the coming years. More expensive financing therefore puts direct pressure on future returns. Against this backdrop, the sell-off is understandable, even if demand itself remains intact.

Key events to watch include Nebius’s earnings report, expected on October 22; the Fed meeting in late October; and the acceptance of Horizon 2. Additionally, the course of the conflict (Iran & the U.S.) must be closely monitored, as it will significantly shape future developments.

Not investment advice

Sources:

https://www.cnbc.com/2026/10/15/coreweave-credit-default-swaps-hit-distress-levels-as-investors-sour-on-ai-debt.html

https://www.cnbc.com/2026/10/15/whats-behind-the-sell-off-in-ai-neocloud-stocks-like-coreweave-and-nebius-.html

https://www.gartner.com/en/newsroom/press-releases/2026-10-14-gartner-says-over-us-dollars-three-and-a-half-trillion-of-artificial-intelligence-infrastructure-spending-could-be-exposed-to-impairment-by-the-end-of-2030

https://www.bls.gov/news.release/cpi.nr0.htm

https://www.bls.gov/news.release/ppi.nr0.htm

https://www.sec.gov/Archives/edgar/data/0001878848/000187884826000052/iren-20260630.htm

https://www.bloomberg.com/news/articles/2026-10-16/nvidia-ceo-on-ai-market-turmoil-all-of-this-is-going-to-pass

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Real Madrid has $IREN (+4,43%) announced as its new official sponsor. For IREN, this is the second major sports sponsorship deal of the year, following its partnership with the Golden State Warriors in June. The club describes the partnership as an alliance between two organizations committed to community, innovation, and technological progress. The announcement does not provide details on the duration, sponsorship category, or financial terms.

IREN provides GPU computing power for AI and is thus a pure-play B2B business. Its customers are AI labs and corporations, not soccer fans. Real Madrid already lists several tech partners on its partner page, including $HPQ (+1,01%), $CSCO (+0,09%) and $ADBE (+0,39%).

What does this sponsorship mean for IREN?

Even with the Warriors deal, IREN’s goal was visibility far beyond the industry, especially in the Bay Area, where the company serves several customers. In Europe, IREN entered the market in May with the acquisition of the Spanish Nostrum Group, thereby expanding its capacity to approximately 490 MW of secured grid capacity in Spain. According to IREN, its expansion in Europe is scheduled to begin in 2028. Against this backdrop, the Real Madrid deal could be a first step toward raising brand awareness there as well.

In my view, IREN is focused on brand awareness beyond the stock market and crypto bubbles. Overall, the deal’s valuation depends on how large the amount is relative to IREN’s marketing budget. It could also be a small deal.

Sources:

https://www.realmadrid.com/en-US/news/club/sponsors/iren-nuevo-patrocinador-del-real-madrid-16-10-2026

Hi everyone,

Over the past few months, I've had discussions with some people here on the forum about $IREN (+4,43%) and expressed my serious concerns about the constant and extreme dilution. My stance on this report therefore remains decidedly skeptical and negative. Since the stock price has recently lost noticeable momentum and is trading sideways or declining, I’d like to take this opportunity to once again examine the risk I mentioned back then in detail and highlight why this should set off real alarm bells.

First things first: I am expressly NOT criticizing the business model here! The expansion into AI cloud infrastructure and data centers is exciting and certainly has tremendous potential. What I do sharply criticize, however, is solely the method of raising capital. And I see this as an absolute threat to the company’s continued existence as an independent entity.

Lately, I’ve been seeing more and more polls on the forum where $IREN (+4,43%) it regularly ranks first in a selection of 10 stocks—sometimes with over 50% approval. This is completely incomprehensible to me. New investors, in particular, are blinded by the narrative and add the stock to their portfolios with far too large a weighting, without understanding the risk involved.

The Financing Method: Constant Stock Issuance via Subscription

To pay for the construction of data centers and expensive Nvidia GPUs, $IREN (+4,43%) one thing above all else: $IREN (+4,43%) it continuously issues new shares. What’s unique—and dangerous—about this is that the company repeatedly seeks approval to issue new shares at intervals of just a few months. It’s essentially a permanently running dilution machine.

* When stock prices rise: No problem. Only a few shares need to be issued to raise fresh capital. The price goes up, and everyone is happy.

* When stock prices stagnate or fall: This is where the trap snaps shut. The lower the price falls—or the longer it remains at a low level—the more shares the company must issue to meet the same capital requirements. Logically, the more shares that must be issued, the greater the dilution for existing investors. $IREN (+4,43%) Under this model, the company is entirely dependent on constantly rising stock prices and cannot afford any period of weakness.

Why Falling Stock Prices Become the Core Trap (The Calculation Example)

If $IREN (+4,43%) , for example, $500 million, the situation looks drastically different at various share prices:

* At a price of $50, 10 million new shares must be issued.

* If the price slips to 25 USD, 20 million new shares suddenly have to be dumped on the market to raise the same amount.

The result is brutal dilution. The number of shares skyrockets—exactly as we’ve seen in real-world examples of well-known negative cases.

A cautionary real-world example from history: Plug Power ($PLUG (+0,36%) )

Anyone who thinks this is just dry theory should take a look at historical hype markets:

* $PLUG (+0,36%) : To finance the construction of factories, the company continuously issued new shares. The number of outstanding shares rose from around 100 to 200 million to well over 1 billion shares! When the stock price slipped, the company had to issue ever-larger quantities of shares at low prices, which massively devalued the stock for existing investors.

The Problem with Earnings Per Share (EPS) & My Forecast

Many people focus only on total revenue or net income. But what really matters is what individual shareholders receive—namely, earnings per share (EPS). And here, a ruthless mechanism comes into play:

* The lower the stock price remains over the long term, the more shares must be issued to raise exactly the same amount of money for investments.

* Consequently, the company’s absolute profit growth must be all the higher so that all shareholders see at least slight growth in earnings per share.

If the number of shares grows rapidly faster than operating profit due to this constant flood of new shares (the classic death spiral), earnings per share will inevitably shrink—even though the company as a whole is growing.

My prediction: This is exactly what leads to a dead end. $IREN (+4,43%) At some point, the quarterly results will be extremely disappointing because operating growth simply can no longer keep pace with this astronomical rate of dilution. When the numbers then turn out to be “only” solid, while the flood of shares continues unstoppably, the house of cards will collapse. That will be the harsh end.

Conclusion

$IREN (+4,43%) does not forgive price weakness. Don’t let yourself be blinded by the hype and the regular stock recommendations or polls: A stock with this risk profile should never be overweighted in your portfolio!

$IREN (+4,43%)
$CRWV (-0,34%)
$NBIS (+0,99%)
$APLD (+7,38%) Lambda

Gartner predicts that 80% of neoclouds will have to cease independent operations by 2030

Gartner warns of a potential massive consolidation in the AI infrastructure market. The problem: Investments in data centers, GPUs, and energy infrastructure could significantly exceed future revenue potential.

Key figures:

• Approximately 7 trillion U.S. dollars in AI infrastructure investments by 2030.
• Only up to 3.6 trillion U.S. dollars in attributable AI revenue, compared to an estimated revenue requirement of 8.5 trillion U.S. dollars.
• More than 80% of Neocloud providers could lose their independence by 2030.
• Over $4 trillion in infrastructure assets could be subject to write-downs by 2032.

Known scenarios:

🔴 Bear Case: AI monetization falls short of expectations. Overcapacity, price pressure, and high financing costs lead to write-downs, bankruptcies, and falling valuations.

🟡 Base Case: AI demand continues to grow, but not every provider benefits. The market consolidates; financially strong hyperscalers gain market share, while smaller neoclouds are acquired or exit the market.

🟢 Bull Case: AI monetization accelerates, with utilization rates and prices remaining high. Investments pay off, and efficient infrastructure operators achieve attractive returns.

What do you think?

Is this already priced in today, alongside higher yields on government bonds and potential interest rate hikes?

Or am I overlooking something else that’s driving today’s price movements?

@Multibagger
@Klein-Anleger
@Tenbagger-Capital
@Get_Rich_or_Die_Tryin
@Raketentoni
@Pazzzi