IREN Limited (NASDAQ: IREN) reported a $638.8 million impairment charge tied largely to older mining equipment, producing a fiscal 2026 net loss of $702.6 million against an $86.9 million profit the prior year.
The writedown has rattled the broader AI data center sector, with sympathy selling hitting capital-intensive peers despite no fresh negative news from those companies.
IREN stock fell 13% to $35.28 at midday Friday, accelerating sharply from a 6% decline recorded earlier in the morning session.
Applied Digital (NASDAQ: APLD) dropped 7% to $25.55, while TeraWulf (NASDAQ: WULF) fell 7% to $15.39 and Core Scientific (NASDAQ: CORZ) declined 7% to $16.39, matching the peer move almost identically.
The Global X Data Center and Digital Infrastructure ETF (NASDAQ: DTCR) fell only 1% to $28.17, while the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) slipped just 0.18% to $769.72, ruling out a broad macro explanation for the damage.
IREN’s total revenue rose 41.1% to $707 million for fiscal 2026, with AI Cloud revenue surging to $128.8 million from $16.4 million the prior year, and the company closed the year with $7.62 billion in cash and equivalents.
Management said its contracts target $4 billion of annualized revenue by year end, signaling confidence in the company’s ongoing pivot from Bitcoin mining toward AI compute services.
Applied Digital had gained 12% year to date through Thursday’s close, and management previously confirmed at its fiscal Q4 2026 earnings call that all construction projects remain on time and on budget.
The company reported $36 billion of total contracted long-term lease value across five campuses and placed $1.59 billion of 7% senior secured notes, which the CFO described as “225 basis points inside our first placement.”
Trefis flagged Applied Digital’s 229% revenue growth over the trailing twelve months in an August 27 note, underscoring the pace of expansion before Friday’s sector-wide pressure emerged.
TeraWulf had gained 44% year to date through Thursday’s close, supported by a 20-year lease with Anthropic at its Kentucky campus targeting $19 billion of contracted revenue.
Core Scientific entered Friday already down 15% over the prior month, with its initial AMD agreement covering 530 megawatts and more than $14 billion of base contracted revenue providing a longer-term anchor.
The divergence between the pure plays, down 7% to 13%, and the DTCR fund, down just 1%, reveals that selling pressure is concentrated specifically among capex-heavy operators rather than data center infrastructure broadly.
Equinix, Digital Realty Trust, and Micron Technology, all held within DTCR, appear to be absorbing far less damage than the pure-play Bitcoin-to-AI transition names taking the hardest hits Friday.
Valuations are amplifying the move, with IREN carrying a forward price-to-earnings ratio of 137x and Applied Digital sitting at a forward price-to-earnings ratio of 526x, leaving little cushion when a peer books a hardware writedown of this magnitude.
Retail investors have also flagged financing and dilution risk at Applied Digital, and the absence of management commentary from the company Friday has done little to calm nerves across the group.
Traders are watching for stabilization across the pure plays into the afternoon session, with IREN’s price action likely setting the tone for whether the group finds a floor before the close.
Applied Digital’s next earnings report is expected around October 7, representing the next hard catalyst that could reset sentiment across the cohort and provide clearer visibility into capital allocation and project timelines.
