Why Is IREN Stock Rising In Premarket?

The AI cloud company said its stock will get included in the MSCI USA index, effective Feb. 27.

• The inclusion typically triggers automatic buying by index funds and ETFs that track the benchmark, which may lift the stock in the real-term.
• IREN shares have declined in the last three sessions.
• Stocktwits sentiment shifted lower and turned ‘bearish’ on the stock.

IREN Ltd. (IREN) stock jumped 0.4% in early premarket trading on Friday, after news of the stock’s inclusion in the MSCI USA index.

The index includes over 600 U.S. companies, making it slightly broader than the S&P 500, and is considered the international investor’s equivalent to the S&P 500.

Why Does MSCI Inclusion Matter?

Addition to the index, typically triggers automatic buying by index funds and ETFs that track the benchmark, which may lead to a short-term surge in the stock. It also enhances the stock’s visibility among institutional investors, which may support the company's long-term price and capital-raising plans.

“Being added to the MSCI USA Index reflects the scale and liquidity we have built in the business. We believe this milestone will broaden institutional access to IREN as we continue to execute on our AI Cloud strategy,” co-CEO Daniel Roberts said in a statement.

AI Cloud Expansion, Bitcoin Mining Scale

Australia-based IREN builds and operates large-scale data centers for Bitcoin mining and high-performance computing services, including AI workloads.

In the past year, IREN rapidly expanded its data center footprint and achieved industry-scale Bitcoin mining capacity of around 50 exahashes per second. It also secured large-scale contracts, most notably a multi-year, $9.7 billion AI cloud services deal with Microsoft to provide Nvidia GPU capacity over five years. 

Retail Sentiment Remains Weak

The development comes as IREN stock declined for three straight sessions, losing nearly 14%. Stocktwits sentiment declined in tandem with the drop and was ‘bearish’ as of the last reading.

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