Better Artificial Intelligence Stock: Applied Digital vs. CoreWeave

Industry Overview - Artificial intelligence (AI) is driving a significant demand for high-performance data centers, leading to rapid expansion in the cloud sector [1] - The AI infrastructure market is projected to grow from $59 billion in 2025 to $356 billion by 2032, indicating a substantial investment opportunity [3] Company Analysis: Applied Digital - Applied Digital's stock surged nearly 500% over the past 12 months, reaching a 52-week high of $42.27, primarily due to AI-related demand [4] - The company reported a 250% year-over-year revenue increase to $126.6 million in its fiscal 2026 second quarter, with new leases valued at $16 billion signed during the quarter [5] - Despite revenue growth, Applied Digital faces challenges, including the need for costly data center construction, resulting in over $2.6 billion in debt, although it maintains a solid cash position of $1.9 billion [6] - The company is currently not profitable, with operating expenses of $157.5 million in fiscal Q2, leading to an operating loss of $31 million [7] Company Analysis: CoreWeave - CoreWeave, a neocloud provider, has signed an $11 billion lease for data center space with Applied Digital and is experiencing rapid sales growth due to increased demand for AI cloud computing services [8] - In Q3, CoreWeave achieved record revenue of $1.4 billion, a significant increase from $583.9 million in the prior-year period [8]