Introduction to Applied Digital and Core Scientific
As artificial intelligence and blockchain technologies proceed to reshape the digital economy, investors are eyeing the infrastructure behind these trends. Applied Digital and Core Scientific are two emerging players straddling each worlds — offering data center solutions that power AI workloads while maintaining strong ties to crypto mining, particularly Bitcoin.
The Competitive Landscape
With demand surging for high-performance computing and decentralized infrastructure, each corporations are angling for growth in a fast-evolving market. But which stock offers a stronger upside today? In this comparison, we’ll examine APLD and CORZ across fundamentals, scalability, and exposure to next-gen tech trends to assist investors resolve which is the higher buy now.
Applied Digital’s Strategic Pivot
Applied Digital is amid a strategic pivot from traditional crypto mining to AI cloud services and high-performance computing (HPC) hosting. The company is aggressively expanding its data center capability, with its first 100MW HPC facility breaking ground in Ellendale, ND, and its plans to bring an extra 300MW online. Despite the theoretical revenue potential — where 400MW of AI infrastructure could generate greater than $2 billion annually — the firm is treading a dangerous path.
Financial Challenges
APLD’s financials reveal a difficult landscape. Steep money burn, negative free money flow margins, and heavy reliance on debt and preferred equity financing have raised concerns amongst analysts. The company’s current trajectory positions it as a speculative “lottery ticket” investment. While lower local electricity costs in North Dakota can offer some competitive advantage, APLD still must secure key lease agreements and win over major hyperscaler clients.
Core Scientific’s Turnaround
Core Scientific has made a remarkable turnaround by diversifying from its legacy bitcoin mining and specializing in AI infrastructure. The company’s pivot is underpinned by landmark long-term contracts with CoreWeave, exceeding $10 billion in revenues over a 12-year period. This take care of CoreWeave delivers strong revenue visibility while boosting operational capabilities.
Strong Revenue Stream
Additional commitments from its partner, CoreWeave, are anticipated to drive growth, positioning Core Scientific as a frontrunner on this space. With a capability of 1,300 MW and a strategic allocation of 900 MW toward HPC hosting, CORZ is positioning itself with a diversified revenue model that leans on stable, contracted deals.
Comparison of Financial Performance
In the second quarter of fiscal 2025, APLD reported $63.9 million in revenues (a 51% year-over-year increase) driven by hosting and cloud performance. In contrast, Core Scientific reported revenues of $94.9 million (down 33% 12 months over 12 months) and a loss per share of 60 cents within the fourth quarter 2024.
Growth Prospects and Valuation
The Zacks Consensus Estimate for APLD’s fiscal 2025 sales and EPS implies a year-over-year improvement of 52.8% and 26.7%, respectively. In contrast, the Zacks Consensus Estimate for Core Scientific’s 2025 sales and EPS implies a year-over-year decline of three% and an improvement of 98.4%, respectively.
Conclusion
Both Applied Digital and Core Scientific have strong growth potential over the long run as demand for AI services increases adoption of high-performance computing. However, with current fundamentals, Core Scientific has higher odds of generating wealth for investors in comparison with Applied Digital. Core Scientific’s strong revenue stream, diversified revenue model, and improving gross margins make it a more attractive investment option. While Applied Digital is constructing capability and has plans to expand, it should still lag Core Scientific by way of AI infrastructure and revenue growth. As such, investors trying to capitalize on the growing demand for AI and high-performance computing will probably want to consider Core Scientific as the higher buy.
