As artificial intelligence drives explosive demand for data center infrastructure, investors are increasingly eyeing companies powering this digital backbone. Applied Digital (APLD Quick QuoteAPLD - Free Report) and Equinix (EQIX Quick QuoteEQIX - Free Report) are two such stocks riding the AI infrastructure wave, but from very different angles. APLD is a nimble, high-growth player building GPU-intensive data centers tailored for AI workloads, while EQIX is a global heavyweight offering interconnected colocation facilities trusted by enterprises and hyperscalers alike.

Both are capitalizing on AI’s need for power, speed and proximity — but which is the smarter investment today? In this article, we compare APLD and EQIX across growth potential, financial strength, AI positioning, and risk profile to help investors decide which stock offers a stronger edge in the AI infrastructure race.

Factors to Consider for APLD

Applied Digital is rapidly emerging as a key player in the AI-era data center infrastructure space, thanks to its aggressive build-out of high-performance computing (HPC) facilities tailored for artificial intelligence and machine learning workloads. The company’s core advantage lies in its ability to deliver cost-effective, GPU-powered infrastructure in energy-efficient, low-cost locations, most notably through its flagship Ellendale, North Dakota campus. Backed by strategic partnerships with Nvidia and financing from institutions like Macquarie, APLD is positioning itself to meet the soaring demand for AI compute capacity, particularly from startups and specialized enterprises that require dedicated, high-throughput environments.

A major growth catalyst for APLD is the escalating need for AI-specific infrastructure that traditional hyperscalers often can't deliver quickly or affordably. With a pipeline of over 400MW in development and a focus on take-or-pay contracts, APLD is moving from speculative growth to potentially recurring, contract-backed revenues. Moreover, the company’s vertical integration, from construction to hosting, allows for greater control over costs and deployment timelines.

However, APLD faces notable challenges. Its business is still in an early, unprofitable phase, with heavy capital expenditures and negative cash flow. Execution risk remains high, as the company must complete large-scale buildouts on time and secure long-term clients to validate its model. Additionally, competition is intensifying as companies like Equinix and Digital Realty begin tailoring their infrastructure for AI. Regulatory uncertainties around power use, zoning, and environmental impact could also slow future deployments.

Its return on equity of -77.5% is against the industry average of 16.3%.

Factors to Consider for EQIX

Equinix, the world’s largest colocation and interconnection data center provider, is well-positioned to capitalize on the growing demand for AI and digital infrastructure. As enterprises and cloud service providers accelerate AI adoption, EQIX’s global footprint, spanning over 250 data centers across 71 metros, offers a unique value proposition — proximity, scalability and connectivity. Its strategic advantage lies in its Platform Equinix ecosystem, which enables seamless interconnection between cloud services, AI applications, and data sources, critical for reducing latency and optimizing performance in AI workflows.

Equinix is also investing in next-generation infrastructure tailored for AI, including high-density colocation, liquid cooling, and NVIDIA-powered private AI clusters. Its xScale data center initiative, designed for hyperscalers, further strengthens its ability to meet the power and space requirements of large AI workloads. Additionally, Equinix’s REIT structure offers financial stability and consistent dividend payouts, appealing to both growth and income-oriented investors.

Yet, EQIX faces several challenges. Rising energy costs and power availability constraints are pressing concerns, especially as AI workload demands significantly more electricity than traditional cloud services. Regulatory scrutiny around energy consumption and sustainability is intensifying, putting pressure on Equinix to meet aggressive carbon neutrality goals. Moreover, competition from cloud-native players building their own AI infrastructure could limit EQIX’s share of high-performance compute clients.

Despite these headwinds, Equinix remains a dominant force in digital infrastructure. Its scale, reliability, and trusted ecosystem position it well for the AI era, though maintaining energy efficiency and pricing power will be key to sustaining long-term growth.

Its return on equity of 7% is also better than the industry average of 4.7%.

Estimates for APLD and EQIX

The Zacks Consensus Estimate for APLD’s fiscal 2026 revenues and EPS implies a year-over-year increase of 2.4% and 73.6%, respectively.  There was no EPS estimate movement over the past 30 days.  It has a Growth Score of ‘B’.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for EQIX 2025 revenues implies a year-over-year increase of 5.2% while the same for EPS indicates an 8% improvement. EPS estimates have moved northward over the past 30 days. It has a Growth Score of ‘C’.

Image Source: Zacks Investment Research

Are APLD and EQIX Shares Expensive?

Applied Digital is trading at a price to forward 12-month sales multiple of 10.55, above its median of 1.43 over the last five years. Equinix’s price-to-forward 12-month sales multiple is 9.14, above its median of 8.81 over the past five years.

Image Source: Zacks Investment Research

Conclusion

Applied Digital and Equinix both stand to benefit from the surging demand for AI-capable data center infrastructure, but they offer very different investment profiles. APLD is a high-growth, high-risk bet on next-gen GPU compute infrastructure, targeting fast-moving AI firms with purpose-built solutions. EQIX, on the other hand, provides a stable, globally interconnected platform trusted by enterprises and cloud giants alike, with growing AI infrastructure capabilities. Investors seeking aggressive growth potential may find APLD appealing, while those favoring scale, reliability, and steady dividends may choose EQIX.

While both companies carry a Zacks Rank #2 (Buy) at present, EQIX seems to be cheaper with a Value score of ‘D’ compared to APLD, which has a Value score of ‘F’.