Key Takeaways
- CoreWeave’s revenue consistently outpaces Applied Digital, with Q1 2026 sales reaching $2.1 billion versus $126.6 million for Applied Digital.
- Both firms rely on heavy debt to fund growth—CoreWeave holds roughly $25 billion, Applied Digital about $2.6 billion.
- CoreWeave’s price‑to‑sales ratio (~6) is far lower than Applied Digital’s (~21), suggesting the former may be relatively cheaper despite higher absolute debt.
- The two companies have a symbiotic relationship: Applied Digital leases data‑center space to CoreWeave, which drives CoreWeave’s AI‑focused cloud revenue.
- Motley Fool’s Stock Advisor did not include CoreWeave in its current “10 best stocks” list, flagging it as a less‑attractive pick for retail investors at this time.
CoreWeave: Consistent Revenue Expansion
CoreWeave (NASDAQ:CRWV) operates a specialized cloud computing platform that supplies bare‑metal virtual servers, storage, and high‑performance networking to enterprise clients. The company has posted uninterrupted quarter‑over‑quarter revenue growth for the last eight quarters, climbing from $395.4 million in Q2 2024 to $2.1 billion in Q1 2026. As the article notes, “CoreWeave currently demonstrates a stronger position on revenue, maintaining a substantially higher baseline than Applied Digital.” This trajectory is largely driven by its focus on renting computing power to artificial‑intelligence workloads, a niche that has fueled explosive demand. In the first quarter of 2026, revenue surpassed $2 billion, and management disclosed a backlog of nearly $100 billion, signaling that the growth trend is likely to persist.
Applied Digital: Managing Data Center Operations
Applied Digital (NASDAQ:APLD) designs, builds, and manages data‑center infrastructure for high‑performance computing and specialized hosting customers across North America. Unlike CoreWeave, its revenue pattern has been more volatile, reflecting the cyclical nature of data‑center construction and leasing. The firm completed thew cloud business into a separate entity on May 5, 2026, while recording a -78 in the quarter ended Feb. 28, 20206 25‑2026 spin‑off of its cloud business on May 5, 2026, separating that line from its core data‑center operations. For the quarter ended February 28, 2026, Applied Digital reported $126.6 million in revenue—a 139 % year‑over‑year increase—but also posted a stark –78 % net‑income margin, underscoring the cost intensity of its expansion efforts.
Quarterly Revenue Comparison
The table below, sourced from company filings as of July 16, 2026, illustrates the divergent revenue paths:
| Quarter (Period End) | CoreWeave Revenue | Applied Digital Revenue |
|---|---|---|
| Q2 2024 (June 2024) | $395.4 million | $14.7 million |
| Q3 2024 (Sept 2024) | $583.9 million | $60.7 million |
| Q4 2024 (Dec 2024) | $747.4 million | $63.9 million |
| Q1 2025 (Mar 2025) | $981.6 million | $52.9 million |
| Q2 2025 (Jun 2025) | $1.2 billion | $38.0 million |
| Q3 2025 (Sept 2025) | $1.4 billion | $64.2 million |
| Q4 2025 (Dec 2025) | $1.6 billion | $126.6 million |
| Q1 2026 (Mar 2026) | $2.1 billion | $126.6 million |
The data reveal CoreWeave’s steep, steady climb, while Applied Digital’s revenue fluctuates, peaking in Q4 2025 and Q1 2026 at $126.6 million before leveling off.
Why Revenue Matters for Retail Investors
Revenue captures the total money a business brings in before expenses, offering a clear gauge of operational scale. For retail investors, tracking top‑line growth helps assess whether a company is expanding its market share and generating the cash needed to fund future initiatives—or to service debt. In the case of CoreWeave and Applied Digital, revenue trends expose contrasting business models: CoreWeave’s AI‑centric cloud services are scaling rapidly, whereas Applied Digital’s data‑center landlord role grows more modestly and is heavily tied to capital‑intensive construction projects.
Financial Health and Debt Load
Both companies have taken on substantial debt to finance their growth trajectories. CoreWeave’s balance sheet shows roughly $25 billion of debt at the end of Q1 2026, a figure that reflects the massive infrastructure required to deliver AI‑grade compute at scale. Applied Digital, meanwhile, carried about $2.6 billion in debt on its fiscal Q3 balance sheet. The article points out that “The high debt load for each has turned off Wall Street investors, leading to a drop in share price for both companies.” Despite the leverage, CoreWeave’s price‑to‑sales ratio sits around six—a low point for the past year—while Applied Digital trades at a sales multiple of 21, indicating the market views the latter as comparatively expensive relative to its revenue.
Investment Consideration: Should You Buy CoreWeave Stock?
Before committing capital, investors should weigh several factors. The Motley Fool’s Stock Advisor analyst team recently identified its ten best stocks for the coming years; CoreWeave did not make that list. The note cautions: “The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them.” By contrast, historical examples from the same service illustrate the potential payoff of early picks—$1,000 invested in Netflix when it appeared on the list in December 2004 would have grown to $371,842, and a similar investment in Nvidia in April 2005 would now be worth $1,244,783. Stock Advisor’s average total return of 900 % vastly outperforms the S&P 500’s 207 % return, underscoring the service’s track record. Nevertheless, the absence of CoreWeave from the current recommendation suggests analysts see better risk‑adjusted opportunities elsewhere, at least for the near term.
Symbiotic Relationship and Market Outlook
An interesting dynamic links the two firms: Applied Digital leases data‑center space to CoreWeave, effectively serving as a landlord for the cloud provider’s AI workloads. This arrangement adds nuance to the revenue comparison—CoreWeave’s soaring sales are partially underpinned by Applied Digital’s infrastructure, while Applied Digital benefits from a steady tenant but faces slower top‑line growth. As CoreWeave continues to pursue a nearly $100 billion backlog, its reliance on Applied Digital’s facilities may deepen, potentially providing the landlord with more predictable, long‑term revenue streams if lease terms are structured favorably.
Conclusion
CoreWeave exhibits a clear advantage in revenue growth and scale, buoyed by surging demand for AI‑focused cloud services. Applied Digital, while enjoying a recent revenue spike, remains more volatile and carries a higher valuation relative to its sales. Both companies are heavily leveraged, which has pressured their share prices despite strong top‑line momentum. For retail investors, the decision to buy CoreWeave stock hinges on tolerance for debt, confidence in the AI‑cloud market’s durability, and the weight placed on analyst recommendations such as those from Motley Fool’s Stock Advisor. The symbiotic data‑center relationship between the two firms adds a layer of interdependence that could shape future performance, making ongoing monitoring of quarterly revenue trends and debt metrics essential.
https://www.theglobeandmail.com/investing/markets/markets-news/motley/3356820/coreweave-vs-applied-digital-evaluating-disparities-in-revenue-scale-for-these-artificial-intelligence-companies/