Which Data Center Infrastructure Stock is a Better Buy?
February 19, 20264 Mins read335
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Applied Digital APLD and Vertiv Holdings VRT operate in distinct yet converging segments of the data center infrastructure market. Vertiv provides critical power systems, thermal management and prefabricated infrastructure solutions for hyperscale and AI-driven facilities. Applied Digital, while primarily a developer and operator of AI-optimized campuses, has expanded deeper into the power and advanced cooling stack through modular electrical design and liquid-cooled infrastructure tailored for high-density computing. Both companies now participate in the hyperscale and AI-factory buildout cycle.
Per Mordor Intelligence, the global Data Center Infrastructure Management market is projected to grow from $4.29 billion in 2026 to $9.99 billion by 2031, witnessing a CAGR of 18.43%. Rising AI-driven thermal loads, increasing rack power densities and accelerating hyperscale deployments are key growth drivers. With both companies positioned to benefit from this expansion, the question is which presents the stronger investment case now. Let’s delve deeper to find out.
Applied Digital is well-positioned to benefit from the accelerating buildout of AI-focused data center capacity, where power density and thermal efficiency are becoming as critical as compute availability. The company operates through two primary segments: a Data Center Hosting business serving cryptocurrency mining customers and an HPC Hosting segment developing purpose-built AI campuses for investment-grade hyperscalers. Its strategy centers on energy-efficient design, scalable power architecture and cooling systems engineered for high-density GPU environments.
The HPC segment deploys proprietary waterless, liquid-cooling architecture engineered to support the extreme power densities of modern AI clusters. Applied Digital has contracted 600 megawatts across Polaris Forge 1 and Polaris Forge 2, representing approximately $16 billion in prospective lease revenues under long-term agreements. The on-time energization of the first 100-megawatt building at Polaris Forge 1 supports confidence in construction execution and project management capabilities. Investments in advanced liquid cooling through Corintis and an active power generation initiative with Babcock & Wilcox, anchored by a limited notice to proceed for a $1.5 billion project targeting 1 GW of capacity across four natural gas-fired plants by 2028, further deepen its exposure to the broader power and thermal infrastructure stack.
However, the model remains capital-intensive and execution dependent. Multi-year development timelines may delay full revenue realization, while returns hinge on securing additional long-term leases and managing financing, supply chain and operational risks effectively.
The Zacks Consensus Estimate for APLD’s fiscal 2026 loss is pegged at 36 cents per share. This indicates a year-over-year improvement of 55%.
Applied Digital Corporation Price and Consensus
Applied Digital Corporation price-consensus-chart | Applied Digital Corporation Quote
Vertiv designs and delivers the power, thermal management and IT infrastructure solutions that keep modern data centers operational at scale, serving customers across 130 countries. As AI workloads push rack densities to unprecedented levels, Vertiv’s ability to provide end-to-end systems spanning power distribution, liquid cooling, uninterruptible power supplies and prefabricated modular solutions makes it an indispensable partner to hyperscalers and colocation providers navigating this transition.
Technology leadership is a notable differentiator as Vertiv co-develops an 800-volt DC power architecture with NVIDIA, timed to align with the 2027 rollout of NVIDIA’s Rubin Ultra platforms. This keeps Vertiv one GPU generation ahead of evolving silicon architectures, ensuring its infrastructure solutions remain relevant as rack power requirements scale toward and beyond the megawatt threshold. The PurgeRite acquisition further strengthens fluid management capabilities across primary and secondary cooling loops, reinforcing Vertiv’s end-to-end liquid cooling offering for high-density AI environments.
Vertiv’s growing services business enhances the portfolio. The company supports customers from initial deployment through ongoing operations, creating a recurring revenue stream that deepens customer relationships and creates switching costs that pure-play infrastructure developers like Applied Digital have yet to build. With a backlog of $15 billion and a book-to-bill ratio of approximately 2.9x, revenue visibility remains strong.
The Zacks Consensus Estimate pegs VRT’s 2026 EPS at $5.85, indicating 39.29% year-over-year growth.
Over the past six months, Vertiv’s shares have surged 88.7%, while Applied Digital’s shares have jumped 118.7%. APLD’s outperformance can be attributed to the expanding hyperscaler lease pipeline and anticipated capacity ramp. While Vertiv’s more measured price appreciation carries greater fundamental merit, its advance is supported by consistent earnings growth, a proven end-to-end infrastructure portfolio spanning power, cooling and modular solutions and a record backlog that underpins tangible near-term revenue visibility.
Zacks Investment Research
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Vertiv shares are currently trading at a forward 12-month price-to-sales of 6.95x, a significant discount to Applied Digital’s 19.95x. This divergence suggests that APLD’s premium is built on future execution and capacity ramp expectations rather than current fundamentals. Vertiv’s comparatively modest multiple appears understated given its scaled, profitable operations, expanding order momentum and proven technology portfolio across power and cooling solutions.
Zacks Investment Research
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Both Vertiv and Applied Digital are direct beneficiaries of the accelerating data center infrastructure buildout. APLD offers long-term upside through its expanding hyperscaler lease pipeline and purpose-built AI campus development, but its trajectory remains tied to capital-intensive construction timelines. Vertiv, in contrast, benefits from improving earnings visibility, a proven end-to-end power and thermal management portfolio and a technology roadmap co-developed with NVIDIA that keeps it ahead of the silicon curve. Additionally, Vertiv shares appear attractively valued relative to Applied Digital, offering investors a cheaper entry point into the data center infrastructure theme.
Vertiv sports a Zacks Rank #1 (Strong Buy) at present, making it a better buy compared with Applied Digital, which carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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