Key Points Applied Digital builds data center campuses for cloud and AI companies. Nebius provides customized AI infrastructure services for a wide range of industries. One of these companies is growing faster and trading at more attractive valuations. 10 stocks we like better than Applied Digital › Applied Digital (NASDAQ: APLD) and Nebius (NASDAQ: NBIS) represent two distinct investment options in the rapidly growing artificial intelligence (AI) market. Applied Digital builds data center campuse ...

Group 1: Nvidia Overview - Nvidia's stock has increased by 25,430% over the past decade, making it the world's most valuable company with a market cap of $4.62 trillion, primarily driven by the growth of the AI market [1] - Nvidia is the leading producer of discrete GPUs, initially focusing on the PC gaming market but has since developed powerful GPUs for data centers to handle AI and machine learning tasks [2] - The majority of top tech companies utilize Nvidia's GPUs for AI applications, with the company generating most of its revenue from data center chips, positioning it well for future growth in the AI sector [3] Group 2: Financial Projections - Analysts project Nvidia's revenue and earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 40% from fiscal 2025 to fiscal 2028, as the AI boom continues [4] - Despite a valuation of 31 times next year's earnings, Nvidia is expected to remain a key stock in the AI market for the foreseeable future [4] Group 3: CoreWeave Overview - CoreWeave, an AI infrastructure services provider, was previously a cryptocurrency mining company that transitioned to AI tasks after the cryptocurrency market decline in 2018 [6] - In 2022, CoreWeave invested approximately $100 million in Nvidia's high-end H100 data center GPUs, expanding its data center network from three to 33 across the U.S. and Europe [7] - CoreWeave claims its cloud-based GPUs can process AI tasks about 35 times faster and 80% cheaper than competitors like AWS and Microsoft Azure [7] Group 4: CoreWeave's Financial Situation - CoreWeave's sales are increasing due to the AI boom, but the company is accumulating significant debt and experiencing losses as it expands its data centers [8] - While CoreWeave's stock appears reasonably valued, it is not yet considered a direct competitor to Nvidia [8]

Core Insights - Nebius, formerly Yandex, has transitioned from a Russian search engine to an AI infrastructure services provider based in Amsterdam, following the divestment of its Russian assets and rebranding [2][3] - The company's stock has experienced significant growth, trading at approximately $100, driven by the booming AI market and strategic partnerships with major tech firms [3][10] Business Model - Nebius operates one first-party data center in Finland and leases additional data centers in Missouri, France, Iceland, and the U.K., with plans for a second data center in New Jersey [4] - The company utilizes Nvidia's high-performance GPUs in its data centers, allowing clients to outsource their AI processing needs instead of investing in their own infrastructure [5] - Nebius differentiates itself by offering managed software services and dedicated solutions for specific markets, positioning itself as a full-stack AI infrastructure provider [6] Financial Performance - In 2024, Nebius reported a revenue increase of 462% to $117.5 million, although it recorded an adjusted EBITDA of negative $266.4 million [8] - For the first nine months of 2025, revenue surged another 437% year over year to $302.1 million, with adjusted EBITDA improving from negative $162.4 million to negative $79.9 million [8] - The company anticipates an annualized revenue run rate of $7 billion to $9 billion by the end of 2026, driven by significant contracts with Microsoft and Meta [9][10] Future Projections - Analysts project Nebius' revenue to rise 392% to $578.2 million in 2025, 191% to $1.68 billion in 2026, and 158% to $4.34 billion in 2027, with expectations of positive adjusted EBITDA in 2026 [11] - The company's market cap is currently $25.7 billion, trading at 15 times next year's sales, with potential for significant growth if it meets or exceeds analyst expectations [13][14]

Core View - CoreWeave reported a significant revenue increase of 420% year-over-year, achieving $980 million in Q1, but warned that AI cloud business revenue expectations are "unstable," projecting a slowdown in annual revenue growth to 190% [1][3][23]. Financial Performance - Q1 revenue was $981.6 million, up from $188.7 million in the same period last year, with adjusted revenue reaching $163 million, a 550% increase [2]. - The company reported a net loss of $314.6 million, compared to a loss of $129.2 million in the previous year, with an adjusted EBITDA margin of 62% [2][20]. - Q1 earnings per share were a loss of $1.49, with capital expenditures ranging from $3 billion to $3.5 billion for Q2 and $20 billion to $23 billion for the full year [2][22]. Revenue Guidance - Despite strong Q1 performance, the company anticipates a significant reduction in annual revenue growth guidance to 190%, less than half of Q1's growth rate [3][23]. - For Q2, revenue is expected to be between $1.06 billion and $1.1 billion, with adjusted revenue between $140 million and $170 million [22][23]. Contracts and Client Relationships - CoreWeave's remaining performance obligations (RPO) decreased from $15.1 billion to $14.7 billion, with a new agreement with OpenAI valued at up to $11.9 billion not yet included in the RPO [7][18]. - The company signed a new agreement with a "hyperscale customer" and expanded a contract with a large AI enterprise worth $4 billion, which will be reflected in future revenue [7][9]. Market Position and Strategy - CoreWeave's business model relies on signing contracts before purchasing NVIDIA AI chips and other data center equipment, positioning it as a barometer for AI-related spending [3][10]. - The company is focused on expanding its capabilities, financing infrastructure, differentiating its platform, and enhancing market outreach [13][15]. Industry Outlook - The demand for advanced AI infrastructure is rapidly increasing, with expectations that AI will contribute $20 trillion to the global economy by 2030 [12]. - CoreWeave has raised over $21 billion to expand its infrastructure and data center capabilities, with the recent IPO seen as a significant milestone in its financing strategy [12][13].