Applied Digital vs. IREN: Which Technology Stock Is a Better Buy for 2027?

Investors eyeing digital infrastructure exposure may consider Applied Digital (APLD) and IREN (IREN) as potential stock picks for 2027. Both companies operate high-performance data centers, but they target different segments of the computing market. While Applied Digital focuses on AI campuses for major hyperscalers, IREN is shifting away from digital assets towards cloud services.

Applied Digital showcased strong growth in its latest fiscal year, with revenue increasing by 167.5% to nearly $611.3 million in FY 2026. However, the company reported a net loss of almost $249 million. The high costs of building and operating advanced data centers have not been offset by sufficient revenue generation yet. The company has a debt-to-equity ratio of approximately 2.9x and a current ratio of 4.0x, indicating its ability to cover short-term liabilities with current assets.

Its free cash flow was negative $2.8 billion, mainly due to high capital expenditures for construction.

IREN, on the other hand, has been aggressively expanding its physical footprint to meet future demand by building and operating next-generation data centers. In FY 2026, the company's revenue grew by 41.1% to approximately $707.0 million, although it reported a net loss of around $702.6 million due to heavy capital requirements of its business pivot.

The company's debt-to-equity ratio is roughly 1.9x, and its current ratio is approximately 3.6x. IREN's free cash flow was negative $2.2 billion, as it directed significant capital towards data center expansion.

While Applied Digital faces risks from its heavy reliance on a few customers, its long-term leases provide investors with clearer visibility into future revenue. The company's flagship data center campus is already operational, contributing to a substantial increase in revenue in the most recent quarter. This growth is expected to become more stable as the company starts receiving ongoing rent from its tenants.

Meanwhile, IREN's AI cloud business is growing rapidly, but it has missed earnings estimates in the past quarter and is grappling with financing concerns surrounding AI infrastructure.

When comparing these two companies, Applied Digital appears to be the better buy for 2027. Its transition to specialized infrastructure for AI and high-performance computing workloads, combined with long-term leases from major customers, provides a more stable foundation for future revenue. However, investors should be aware of the company's heavy debt levels and regulatory uncertainties. IREN's growth potential cannot be ignored, but its recent performance and valuation metrics make it a riskier choice at the moment.