Another victory for IREN?
You've probably all heard that Nvidia is raising its GPU prices for customers by 15%
This move once again shows Nvidia's monopoly with customers and also reminds us that memory costs ultimately pass on to the end customer,
But there's something else that most investors might not have noticed:
This move may well illustrate IREN's advantage over cloud companies that had to commit earlier to expensive capacity.
IREN was among the companies that did not rush to close contracts at any price, but waited for capacity to become operational - even if it meant waiting longer without contracts,
Many investors looked at IREN, which continued to build and not close contracts - while other companies like Nebius and CoreWeave announced huge contracts,
Meanwhile, the company has already purchased its GPUs - and therefore Nvidia's price increase does not affect it in the same way as its competitors.
If cloud GPU prices rise by about 15%, while IREN already holds hardware purchased at lower prices, it can price the new capacity at higher market prices - without absorbing the full increase in hardware cost.
The implication can be very significant for its profit margins.
The fact that IREN waited for available capacity and simultaneously purchased the GPUs in advance may now allow IREN to benefit from higher pricing - while the basic cost of the hardware has already been set.
Its competitors lease all possible capacity in advance, the price is already set - and now,
With a company like Nebius forced to purchase new GPUs for new contracts, the purchase will be made at the higher price - while IREN will be able to close new contracts based on the new price while paying the old price.
This affects both its pricing power against competitors - and its final profit margins,
If the trend of rising GPU prices indeed continues - this advantage could become even more significant in terms of profitability for IREN.