Top AI Stocks Compared: Which Digital Technology Leader Offers Stronger Growth Potential?

Applied Digital and Nebius stand out as two compelling artificial intelligence (AI) stocks, each representing different facets of the AI infrastructure ecosystem. Applied Digital focuses on building and leasing data center campuses primarily for cloud, AI, and high-performance computing enterprises. Nebius, on the other hand, provides integrated cloud-based AI infrastructure services, managing hardware and software solutions for diverse industries.

Both companies have seen their stock prices more than triple over the last year, reflecting strong investor enthusiasm amid the AI boom. This article compares their business models, financial prospects, and market valuations to assess which stock currently offers a better investment opportunity.

Applied Digital’s Evolving Business Model

Applied Digital initially served blockchain and Bitcoin mining clients before shifting focus in 2022 towards cloud computing, AI, and HPC sectors. Its primary business is real estate-oriented: constructing data centers, activating power, and leasing space to clients who then deploy their own servers. This setup resembles a specialized real estate investment rather than a traditional technology firm.

In 2023, Applied Digital launched Sai Computing, a subsidiary powering its own cloud-based AI infrastructure using Nvidia GPUs. Although Sai grew rapidly, it competed directly with some data center clients such as Amazon and Microsoft. To resolve this conflict and align with its vision of becoming a data center REIT akin to Digital Realty Trust, Applied Digital plans to spin off Sai and merge it with EKSO Bionics Holdings, creating a new company named ChronoScale.

Applied Digital’s core lease-based revenue benefits from long-term contracts totaling $16 billion over 15 years, largely driven by CoreWeave, a fast-growing AI infrastructure firm. The company aims to more than double the capacity at its Polaris Forge 1 campus to meet demand. However, ongoing losses currently delay its transition to becoming a REIT, which would make it attractive due to dividend distributions.

Analysts forecast a 38% increase in Applied Digital’s revenue for fiscal 2026, reaching $297 million, with net losses narrowing to $91 million. The enterprise value stands around $8 billion, suggesting a valuation of 27 times this year’s sales. While this appears pricey, future long-term lease revenues exceeding $1 billion might justify the current valuation.

Nebius’ Strategic Rebranding and Growth Prospects

Nebius emerged from the former Russian tech giant Yandex after geopolitical sanctions prompted a business relocation to the Netherlands. It abandoned Russian assets and repositioned itself as a full-stack cloud-based AI infrastructure provider focused on the U.S. and European markets. Nebius hosts powerful AI servers in its own data centers and offers managed services to clients preferring cloud-based GPU resources.

Unlike CoreWeave and Applied Digital’s straightforward leasing models, Nebius integrates managed software with AI infrastructure, targeting machine learning training, educational technology, automation, and robotics applications. It has secured significant contracts from technology leaders like Microsoft and Meta Platforms.

Nebius aims for monthly revenues that annualize to $7 billion to $9 billion by year-end, signaling tremendous scale growth potential. For fiscal 2026, analysts project a 521% surge in revenue to $3.45 billion, followed by a 125% increase in 2027 to $7.8 billion. Despite large expenditures causing continued losses, Nebius’s enterprise value of $24 billion equates to roughly seven times expected 2026 sales, a relatively modest valuation given its rapid growth.

Key Data Comparison

Investment Outlook

Both companies cater to expanding AI infrastructure demand but translate growth into value differently. Applied Digital’s model prioritizes steady lease income but faces short-term challenges due to its spin-off and slower growth outlook. Nebius offers much faster revenue growth and a clearer trajectory toward large-scale cloud AI market leadership. Its diversified AI software-plus-hardware services provide exposure to multiple high-growth verticals.

The combination of Nebius’s aggressive expansion, strategic contracts with tech giants, and more attractive valuation metrics currently positions it as the more promising AI stock. Applied Digital requires navigating complex restructuring and operational scaling before it can fulfill its REIT ambitions and deliver sustained profitability.

Investors seeking higher growth potential at a reasonable valuation may prefer Nebius. Meanwhile, those favoring a data center REIT-like play with long-term lease stability might keep an eye on Applied Digital’s progress, especially post-spin-off. As AI adoption accelerates, both companies should remain relevant players shaping the future of AI infrastructure services.