Applied Digital vs. TeraWulf: Which AI Data Center Stock Is the Better Buy?

Applied Digital (APLD) and TeraWulf (WULF) are two leading AI stocks operating in the data center industry. While both companies serve hyperscalers, their stock performance has differed this year. TeraWulf has gained 36% compared to Applied Digital's 11% growth. Investors should consider several factors when deciding which stock to buy.

Applied Digital has secured 1.4 gigawatts of contracted critical IT load, amounting to around $36 billion in total contracted lease revenue. Most contracts have 15-year terms, including deals for 300 megawatts at Delta Forge 1 and Polaris Forge 3 sites. In contrast, TeraWulf only has 839 megawatts of leased capacity, most of which is under a 20-year deal with Anthropic for $19 billion, covering 401 megawatts.

Applied Digital's pipeline of roughly 3 gigawatts is larger than TeraWulf's 2.1 gigawatts. Both companies are in the early stages of discussions for power and land acquisition, so the gap between their gigawatt pipeline could change quickly. Applied Digital's market cap is $7.8 billion, slightly higher than TeraWulf's $7.7 billion.

Despite having similar market caps, Applied Digital's valuation, larger gigawatt pipeline, higher revenue, and lower losses make it the better buy.