Iren shares dropped 4.9% in morning trading on Friday, moving closer to the bottom of their 52-week range. The decline came as a broader selloff in the neocloud sector continued for a third straight session.

The selloff began after Gartner released a research report on Wednesday. The report predicted that more than 80% of neocloud GPU-rental providers will stop operating as independent businesses by 2030. Gartner cited a structural mismatch between revenues and capital costs as the reason.

The warning directly affects Iren's business model. The company is currently shifting away from Bitcoin mining toward AI cloud infrastructure. Management has projected capital spending of approximately $25 billion to $30 billion in fiscal 2027.

A SemiAnalysis report from earlier this month has also affected investor confidence. The report identified serious operational problems at Iren's legacy data centers in Prince George and Mackenzie, British Columbia. The issues included multi-day power outages, network disruptions, and storage failures. SemiAnalysis labeled one of the British Columbia sites among the worst in the industry.

The stock fell roughly 20% over the ten sessions following that report. It has not been able to sustain a recovery since then.

A rise in CoreWeave's high-yield bond yields has raised concerns about financing costs across the AI infrastructure sector. Venture capitalist Chamath Palihapitiya warned of an emerging private credit bubble in AI spending.