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CRWV vs. APLD: Which AI Data Center Stock Has More Upside Potential?
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Key Takeaways
CoreWeave is benefiting from a $104B backlog and rapidly expanding AI infrastructure demand.
CoreWeave raised its 2026 revenue outlook as adjusted EBITDA doubled to $1.5B with a 59% margin.
Applied Digital faces high debt, customer concentration and execution risks across five major campuses.
The AI boom is rapidly transforming the data center industry, creating major opportunities for companies that can provide the computing power, facilities and electricity needed to support AI workloads. Two companies attracting significant investor attention are CoreWeave, Inc. (CRWV - Free Report) and Applied Digital (APLD - Free Report) . There is also an interesting strategic relationship between the two companies. CoreWeave itself is one of Applied Digital's major customers. APLD's infrastructure therefore allows investors to gain exposure to the same AI buildout from a different angle.
Per a report from Fortune Business Insights, the global AI data center market is projected to grow from $21.27 billion in 2026 to $133.51 billion by 2034, representing a CAGR of 25.8%. Although both are benefiting from the same secular trend, their business models are quite different. CoreWeave operates a specialized AI cloud platform, while Applied Digital focuses more heavily on developing and leasing large-scale data center infrastructure. This distinction matters when evaluating their growth potential, risk and valuation.
Let’s take a closer look.
The Case for APLD Stock
Applied Digital has been steadily evolving from a broader digital-infrastructure company into a more focused data center platform serving HPC, AI and accelerated-compute workloads. The company completed the separation of its cloud services business during fiscal 2026, with Applied Digital retaining approximately 96% of ChronoScale. Applied Digital also continues to have exposure to CoreWeave through its existing leases. It strengthened its CoreWeave leases through a restructured SPV, unconditional guarantees and a $50 million letter of credit.
However, the biggest challenge is the enormous amount of capital required to turn contracted projects into operating assets. Applied Digital had $4.2 billion in cash, cash equivalents and restricted cash against $5 billion of debt as of May 31, 2026. The company recently completed a $2.15 billion senior secured notes offering to fund development at Polaris Forge 2 and later closed another $1.59 billion senior secured notes offering to fund the fourth building at Polaris Forge 1. It also expanded its revolving credit facility to support development.
Debt financing can accelerate growth, but it also increases interest obligations and execution risk. If construction costs rise, projects are delayed, or customer requirements change, the financial burden could grow. GAAP profitability is another concern. Applied Digital reported a fiscal fourth-quarter net loss attributable to common stockholders of $110.6 million and a loss of $249.2 million in fiscal 2026. Consequently, investors should not view adjusted EBITDA growth alone as proof that the company has already reached sustainable profitability.
Image Source: Zacks Investment Research
Customer concentration remains another key risk for Applied Digital, with CoreWeave as the sole tenant across the fully leased 400 MW Polaris Forge 1 and a single crypto customer in its legacy hosting business. Execution risk is also elevated as the company develops five multibillion-dollar campuses simultaneously, making timely construction, power delivery and lease execution critical to converting capacity into stable rental income.
The Case for CRWV Stock
CoreWeave has emerged as a prominent AI-focused cloud infrastructure provider. Its platform is designed specifically for accelerated computing and AI workloads, giving customers access to large amounts of GPU computing capacity without having to build their own infrastructure. The company's latest results highlight the scale of demand. CoreWeave reported $2.6 billion in second-quarter revenue, while its revenue backlog reached approximately $104 billion as of June 30. It also disclosed more than $25 billion of additional customer commitments added early in the third quarter.
This hefty backlog provides substantial visibility into future revenue and demonstrates that major AI customers are willing to commit to long-term computing capacity. CoreWeave is also expanding beyond its existing customer base. Its relationships include AI labs, hyperscalers and enterprises, while recent customer wins and expansions include companies such as Caterpillar, Bentley Systems, Databricks, Hudson River Trading and Runway ML. Active power reached 1.5 GW, while contracted power rose to 3.7 GW by quarter-end and 4.2 GW afterward, keeping it on track for more than 8 GW of active power by 2030. CRWV also expects more than 1.85 GW of active power by year-end.
CoreWeave is also expanding beyond traditional GPU cloud infrastructure into higher-margin AI services. Its managed inference business grew from $1 million to more than $100 million in booked ARR within a few months, with management targeting at least $250 million by year-end. Storage, CPU, networking and software businesses already generated more than $400 million in ARR, while seven new AI platform capabilities and continued development of its AI-native platform are helping customers move from experimentation to production.
Profitability is beginning to benefit from increasing scale and pricing power. Adjusted EBITDA doubled year over year to $1.5 billion, with a 59% margin, while adjusted operating income increased to $128 million. Recent contracts are carrying contribution margins 5–10 percentage points higher than those signed in recent quarters, supported by strong demand, higher pricing and the value customers place on CRWV's performance and reliability. Management raised its 2026 outlook, now expecting revenue of $12.4–$13.2 billion, adjusted operating income of $960 million–$1.15 billion and year-end annualized revenue of $18.5–$19.5 billion.
Image Source: Zacks Investment Research
The opportunity, however, comes with a major caveat. CoreWeave is extremely capital-intensive. The company raised its 2026 capital expenditure forecast to $35 billion-$39 billion from $31 billion-$35 billion previously. The pressure is evident in its $567 million adjusted net loss, while interest expense more than doubled to $640 million as debt increased to fund expansion. With more than $32 billion of capital secured, leverage remains a concern, and interest expense is expected to rise to $860 million–$940 million. Supply-chain challenges, intensifying competition and reliance on large customers also pose risks if deployments are delayed or lost.
CRWV & APLD’s Share Performance Trajectory
In the past month, CRWV has surged 24.4% while APLD is up 9.4%.
Image Source: Zacks Investment Research
Valuation Considerations
CRWV trades at a forward 12-month price-to-sales (P/S) ratio of 1.93, below APLD’s 8.01.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for CRWV & APLD?
The Zacks Consensus Estimate for CRWV’s earnings for the current year has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for APLD’s earnings for the current fiscal year has also been revised downward over the past 60 days.
Image Source: Zacks Investment Research
CRWV or APLD: Which Stock Has More Upside?
CRWV at present carries a Zacks Rank #3 (Hold) while APLD has a Zacks Rank #4 (Sell).
For aggressive investors seeking the bigger long-term growth opportunity, CoreWeave appears to have the stronger case. Its enormous backlog, rapidly expanding revenue base and direct exposure to AI compute demand give it a powerful growth engine. Second-quarter results suggest that demand remains exceptionally strong, while management is expanding capacity aggressively to capture that opportunity. However, concerns include enormous capital requirements, leverage, customer concentration and the possibility that AI infrastructure supply eventually grows faster than demand. CRWV appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.
Applied Digital faces different risks. Large data center projects can experience construction and power-delivery delays, while reliance on a relatively small number of large customers can create concentration risk. Management has also warned that labor and construction constraints could cause significant delays across the AI infrastructure industry during 2026 and 2027. Hence, investors should avoid this stock for now.
View the Zacks #1 Rank List
Image: Bigstock
CRWV vs. APLD: Which AI Data Center Stock Has More Upside Potential?
Key Takeaways
The AI boom is rapidly transforming the data center industry, creating major opportunities for companies that can provide the computing power, facilities and electricity needed to support AI workloads. Two companies attracting significant investor attention are CoreWeave, Inc. (CRWV - Free Report) and Applied Digital (APLD - Free Report) . There is also an interesting strategic relationship between the two companies. CoreWeave itself is one of Applied Digital's major customers. APLD's infrastructure therefore allows investors to gain exposure to the same AI buildout from a different angle.
Per a report from Fortune Business Insights, the global AI data center market is projected to grow from $21.27 billion in 2026 to $133.51 billion by 2034, representing a CAGR of 25.8%. Although both are benefiting from the same secular trend, their business models are quite different. CoreWeave operates a specialized AI cloud platform, while Applied Digital focuses more heavily on developing and leasing large-scale data center infrastructure. This distinction matters when evaluating their growth potential, risk and valuation.
Let’s take a closer look.
The Case for APLD Stock
Applied Digital has been steadily evolving from a broader digital-infrastructure company into a more focused data center platform serving HPC, AI and accelerated-compute workloads. The company completed the separation of its cloud services business during fiscal 2026, with Applied Digital retaining approximately 96% of ChronoScale. Applied Digital also continues to have exposure to CoreWeave through its existing leases. It strengthened its CoreWeave leases through a restructured SPV, unconditional guarantees and a $50 million letter of credit.
However, the biggest challenge is the enormous amount of capital required to turn contracted projects into operating assets. Applied Digital had $4.2 billion in cash, cash equivalents and restricted cash against $5 billion of debt as of May 31, 2026. The company recently completed a $2.15 billion senior secured notes offering to fund development at Polaris Forge 2 and later closed another $1.59 billion senior secured notes offering to fund the fourth building at Polaris Forge 1. It also expanded its revolving credit facility to support development.
Debt financing can accelerate growth, but it also increases interest obligations and execution risk. If construction costs rise, projects are delayed, or customer requirements change, the financial burden could grow. GAAP profitability is another concern. Applied Digital reported a fiscal fourth-quarter net loss attributable to common stockholders of $110.6 million and a loss of $249.2 million in fiscal 2026. Consequently, investors should not view adjusted EBITDA growth alone as proof that the company has already reached sustainable profitability.
Image Source: Zacks Investment Research
Customer concentration remains another key risk for Applied Digital, with CoreWeave as the sole tenant across the fully leased 400 MW Polaris Forge 1 and a single crypto customer in its legacy hosting business. Execution risk is also elevated as the company develops five multibillion-dollar campuses simultaneously, making timely construction, power delivery and lease execution critical to converting capacity into stable rental income.
The Case for CRWV Stock
CoreWeave has emerged as a prominent AI-focused cloud infrastructure provider. Its platform is designed specifically for accelerated computing and AI workloads, giving customers access to large amounts of GPU computing capacity without having to build their own infrastructure. The company's latest results highlight the scale of demand. CoreWeave reported $2.6 billion in second-quarter revenue, while its revenue backlog reached approximately $104 billion as of June 30. It also disclosed more than $25 billion of additional customer commitments added early in the third quarter.
This hefty backlog provides substantial visibility into future revenue and demonstrates that major AI customers are willing to commit to long-term computing capacity. CoreWeave is also expanding beyond its existing customer base. Its relationships include AI labs, hyperscalers and enterprises, while recent customer wins and expansions include companies such as Caterpillar, Bentley Systems, Databricks, Hudson River Trading and Runway ML. Active power reached 1.5 GW, while contracted power rose to 3.7 GW by quarter-end and 4.2 GW afterward, keeping it on track for more than 8 GW of active power by 2030. CRWV also expects more than 1.85 GW of active power by year-end.
CoreWeave is also expanding beyond traditional GPU cloud infrastructure into higher-margin AI services. Its managed inference business grew from $1 million to more than $100 million in booked ARR within a few months, with management targeting at least $250 million by year-end. Storage, CPU, networking and software businesses already generated more than $400 million in ARR, while seven new AI platform capabilities and continued development of its AI-native platform are helping customers move from experimentation to production.
Profitability is beginning to benefit from increasing scale and pricing power. Adjusted EBITDA doubled year over year to $1.5 billion, with a 59% margin, while adjusted operating income increased to $128 million. Recent contracts are carrying contribution margins 5–10 percentage points higher than those signed in recent quarters, supported by strong demand, higher pricing and the value customers place on CRWV's performance and reliability. Management raised its 2026 outlook, now expecting revenue of $12.4–$13.2 billion, adjusted operating income of $960 million–$1.15 billion and year-end annualized revenue of $18.5–$19.5 billion.
Image Source: Zacks Investment Research
The opportunity, however, comes with a major caveat. CoreWeave is extremely capital-intensive. The company raised its 2026 capital expenditure forecast to $35 billion-$39 billion from $31 billion-$35 billion previously. The pressure is evident in its $567 million adjusted net loss, while interest expense more than doubled to $640 million as debt increased to fund expansion. With more than $32 billion of capital secured, leverage remains a concern, and interest expense is expected to rise to $860 million–$940 million. Supply-chain challenges, intensifying competition and reliance on large customers also pose risks if deployments are delayed or lost.
CRWV & APLD’s Share Performance Trajectory
In the past month, CRWV has surged 24.4% while APLD is up 9.4%.
Image Source: Zacks Investment Research
Valuation Considerations
CRWV trades at a forward 12-month price-to-sales (P/S) ratio of 1.93, below APLD’s 8.01.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for CRWV & APLD?
The Zacks Consensus Estimate for CRWV’s earnings for the current year has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for APLD’s earnings for the current fiscal year has also been revised downward over the past 60 days.
Image Source: Zacks Investment Research
CRWV or APLD: Which Stock Has More Upside?
CRWV at present carries a Zacks Rank #3 (Hold) while APLD has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For aggressive investors seeking the bigger long-term growth opportunity, CoreWeave appears to have the stronger case. Its enormous backlog, rapidly expanding revenue base and direct exposure to AI compute demand give it a powerful growth engine. Second-quarter results suggest that demand remains exceptionally strong, while management is expanding capacity aggressively to capture that opportunity. However, concerns include enormous capital requirements, leverage, customer concentration and the possibility that AI infrastructure supply eventually grows faster than demand. CRWV appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.
Applied Digital faces different risks. Large data center projects can experience construction and power-delivery delays, while reliance on a relatively small number of large customers can create concentration risk. Management has also warned that labor and construction constraints could cause significant delays across the AI infrastructure industry during 2026 and 2027. Hence, investors should avoid this stock for now.