We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
IREN vs. Applied Digital: Which AI Data Center Stock Has an Edge?
Read MoreHide Full Article
Key Takeaways
IREN targets $3.7B in AI cloud ARR with 150K GPUs and has $2.3B already under contract.
APLD has $16B in leases but faces uncertainty from power, construction and lease timing.
IREN trades at a lower valuation than Applied Digital, offering better downside protection.
IREN Limited (IREN - Free Report) and Applied Digital (APLD - Free Report) are key players in the artificial intelligence (AI) infrastructure market that offer next-generation data center infrastructure targeting high-performance computing (HPC), AI workloads and scalable computing. IREN Limited is one of the world’s largest and lowest-cost bitcoin miners that operate next-generation data centers using renewable energy, while Applied Digital focuses on HPC data centers designed for AI workloads.
Currently, IREN and APLD have an opportunity to capitalize on the emerging AI space as the need for AI compute infrastructure is witnessing a CAGR of 23.8%, per a report by MarketsAndMarkets. With this strong industry growth forecast, the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for IREN Stock
IREN is increasing its AI cloud capacity to 150,000 graphics processing units (GPUs), which management believes is the key to support its target of more than $3.7 billion in AI cloud annualized run-rate (ARR) revenues by the end of 2026. IREN's latest expansion includes a purchase agreement of more than 50,000 NVIDIA B300 GPUs. This expands the company’s total GPU fleet to 150,000 GPUs. These GPUs are expected to be deployed in Mackenzie, British Columbia and Childress, TX, using IREN’s existing air-cooled data center capacity.
The company plans to deploy the GPUs in phases during the second half of 2026. The target looks possible because IREN already has a good amount of AI cloud revenues under contract. During its fiscal second-quarter 2026 earnings call, management said the company had about $2.3 billion of annualized revenue run rate under contract. This includes the Microsoft deal and about $0.4 billion of contracted revenues at Prince George. Management also said customer demand remains strong and that the company is in multiple advanced talks for large-scale deployments.
IREN also looks better placed from a funding point of view. Management stated that it has secured $9.3 billion of funding over the past eight months through customer prepayments, convertible notes, GPU leasing and GPU financing. This matters because AI cloud expansion needs heavy spending upfront. In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract.
For the latest GPU orders, IREN expects about $3.5 billion of additional capex, including GPUs, servers, storage, networking, labor and other related equipment. For now, the target depends on execution. IREN's ability to deploy these GPUs on time, sign more customer contracts and ramp customer workloads through the second half of 2026 will be the key to hitting the target of $3.7 billion in AI cloud revenues by 2026.
The Case for APLD Stock
Applied Digital is building a large pipeline of AI data centers that can support long-term growth. The company’s first 100-megawatt facility is already live. Management stated that this facility is about one-tenth of the total capacity currently under construction. The company has multiple projects underway, including Polaris Forge 1, Polaris Forge 2 and Delta Forge 1. As of now, APLD has close to 1 gigawatt of power capacity across sites that are in development or being marketed.
Demand from hyperscalers remains strong. Management noted that multiple hyperscalers are engaged at each site and discussions are ongoing. Some sites are in advanced stages of negotiation. APLD has about $16 billion in contracted lease revenues. These contracts typically run for 15 to 30 years and provide visibility into future revenues, where only a small portion of its total power capacity has been contracted so far. APLD expects revenues to increase over the next 12 months as new buildings come online. The ramp will happen in phases as data halls are energized step by step.
However, certain risks remain. Management stated that lease timing can vary, and there is no fixed timeline for signing agreements. It said each lease has different terms and involves multiple parties, including utilities, which can make the process longer. Further, power availability is another factor limiting the company's growth. APLD noted that expansion depends on access to grid power and that power infrastructure takes time to build, where only a small fraction of its long-term power capacity has been contracted so far.
Since construction and revenue ramp happen in phases and buildings are energized step by step, revenues increase gradually. This means any delays in construction or power readiness can affect the timing of revenues
How Do Earnings Estimates Compare for IREN & APLD?
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 54 cents per share, unchanged over the past 30 days. The company reported earnings of 4 cents per share in fiscal 2025.
The consensus mark for Applied Digital’s fiscal 2026 loss is pegged at 52 cents per share, much wider than 35 cents over the past seven days. APLD reported a loss of 80 cents per share in fiscal 2025.
Year to date, shares of IREN and APLD have returned 25.3% and 28.2%, respectively.
IREN Vs. APLD: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, IREN is trading at a forward sales multiple of 6.25X, significantly lower than APLD’s forward sales multiple of 13.70X. APLD does seem pricey compared with IREN. In contrast, IREN’s reasonable valuation makes it more attractive for investors looking for value and stability.
IREN vs. APLD: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: IREN Has an Edge Over APLD
Both IREN and APLD are key players in the AI infrastructure space, but their near-term outlooks are quite different. APLD’s growth depends more on future lease signings, power availability and construction timelines. Since a significant portion of its capacity is not yet contracted, there is more uncertainty around the timing of revenue growth.
In contrast, IREN’s focus on moving into AI cloud services is showing good early results, and the company has strong contracts, funding support and enough power capacity to grow over time. IREN’s reasonable valuation offers some downside protection as well, giving IREN a clear edge over APLD.
View the Zacks #1 Rank List
Image: Bigstock
IREN vs. Applied Digital: Which AI Data Center Stock Has an Edge?
Key Takeaways
IREN Limited (IREN - Free Report) and Applied Digital (APLD - Free Report) are key players in the artificial intelligence (AI) infrastructure market that offer next-generation data center infrastructure targeting high-performance computing (HPC), AI workloads and scalable computing. IREN Limited is one of the world’s largest and lowest-cost bitcoin miners that operate next-generation data centers using renewable energy, while Applied Digital focuses on HPC data centers designed for AI workloads.
Currently, IREN and APLD have an opportunity to capitalize on the emerging AI space as the need for AI compute infrastructure is witnessing a CAGR of 23.8%, per a report by MarketsAndMarkets. With this strong industry growth forecast, the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for IREN Stock
IREN is increasing its AI cloud capacity to 150,000 graphics processing units (GPUs), which management believes is the key to support its target of more than $3.7 billion in AI cloud annualized run-rate (ARR) revenues by the end of 2026. IREN's latest expansion includes a purchase agreement of more than 50,000 NVIDIA B300 GPUs. This expands the company’s total GPU fleet to 150,000 GPUs. These GPUs are expected to be deployed in Mackenzie, British Columbia and Childress, TX, using IREN’s existing air-cooled data center capacity.
The company plans to deploy the GPUs in phases during the second half of 2026. The target looks possible because IREN already has a good amount of AI cloud revenues under contract. During its fiscal second-quarter 2026 earnings call, management said the company had about $2.3 billion of annualized revenue run rate under contract. This includes the Microsoft deal and about $0.4 billion of contracted revenues at Prince George. Management also said customer demand remains strong and that the company is in multiple advanced talks for large-scale deployments.
IREN also looks better placed from a funding point of view. Management stated that it has secured $9.3 billion of funding over the past eight months through customer prepayments, convertible notes, GPU leasing and GPU financing. This matters because AI cloud expansion needs heavy spending upfront. In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract.
For the latest GPU orders, IREN expects about $3.5 billion of additional capex, including GPUs, servers, storage, networking, labor and other related equipment. For now, the target depends on execution. IREN's ability to deploy these GPUs on time, sign more customer contracts and ramp customer workloads through the second half of 2026 will be the key to hitting the target of $3.7 billion in AI cloud revenues by 2026.
The Case for APLD Stock
Applied Digital is building a large pipeline of AI data centers that can support long-term growth. The company’s first 100-megawatt facility is already live. Management stated that this facility is about one-tenth of the total capacity currently under construction. The company has multiple projects underway, including Polaris Forge 1, Polaris Forge 2 and Delta Forge 1. As of now, APLD has close to 1 gigawatt of power capacity across sites that are in development or being marketed.
Demand from hyperscalers remains strong. Management noted that multiple hyperscalers are engaged at each site and discussions are ongoing. Some sites are in advanced stages of negotiation. APLD has about $16 billion in contracted lease revenues. These contracts typically run for 15 to 30 years and provide visibility into future revenues, where only a small portion of its total power capacity has been contracted so far. APLD expects revenues to increase over the next 12 months as new buildings come online. The ramp will happen in phases as data halls are energized step by step.
However, certain risks remain. Management stated that lease timing can vary, and there is no fixed timeline for signing agreements. It said each lease has different terms and involves multiple parties, including utilities, which can make the process longer. Further, power availability is another factor limiting the company's growth. APLD noted that expansion depends on access to grid power and that power infrastructure takes time to build, where only a small fraction of its long-term power capacity has been contracted so far.
Since construction and revenue ramp happen in phases and buildings are energized step by step, revenues increase gradually. This means any delays in construction or power readiness can affect the timing of revenues
How Do Earnings Estimates Compare for IREN & APLD?
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 54 cents per share, unchanged over the past 30 days. The company reported earnings of 4 cents per share in fiscal 2025.
IREN Limited Price and Consensus
IREN Limited price-consensus-chart | IREN Limited Quote
The consensus mark for Applied Digital’s fiscal 2026 loss is pegged at 52 cents per share, much wider than 35 cents over the past seven days. APLD reported a loss of 80 cents per share in fiscal 2025.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
IREN vs. APLD: Price Performance and Valuation
Year to date, shares of IREN and APLD have returned 25.3% and 28.2%, respectively.
IREN Vs. APLD: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, IREN is trading at a forward sales multiple of 6.25X, significantly lower than APLD’s forward sales multiple of 13.70X. APLD does seem pricey compared with IREN. In contrast, IREN’s reasonable valuation makes it more attractive for investors looking for value and stability.
IREN vs. APLD: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: IREN Has an Edge Over APLD
Both IREN and APLD are key players in the AI infrastructure space, but their near-term outlooks are quite different. APLD’s growth depends more on future lease signings, power availability and construction timelines. Since a significant portion of its capacity is not yet contracted, there is more uncertainty around the timing of revenue growth.
In contrast, IREN’s focus on moving into AI cloud services is showing good early results, and the company has strong contracts, funding support and enough power capacity to grow over time. IREN’s reasonable valuation offers some downside protection as well, giving IREN a clear edge over APLD.
Currently, IREN and APLD carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.