Iren vs Applied Digital: Which Offers Stronger Long-Term Fundamentals?

The AI Data Center Boom Creates Opportunity for Both Players

The race for artificial intelligence infrastructure is accelerating at an unprecedented pace. Major hyperscalers like Microsoft, Amazon, and Alphabet are funneling hundreds of billions into data center expansion. An estimated $350 billion was invested in data center capacity last year alone, with projections showing even steeper growth ahead.

Two companies have emerged as key beneficiaries of this infrastructure boom: Iren (NASDAQ: IREN), formerly known as Iris Energy, and Applied Digital (NASDAQ: APLD). Both have secured transformative contracts with major cloud service providers, catapulting their stock valuations skyward. Iren’s share price climbed 285% in 2025, while Applied Digital gained 221%.

Comparing the Deal Quality and Scale

Applied Digital made headlines by landing a $7 billion, 15-year agreement with CoreWeave to provide compute capacity for AI workloads. Iren countered with a blockbuster $9.7 billion deal with Microsoft, securing what many consider a premier hyperscaler partnership.

While deal size matters, the more significant distinction lies in what each company owns versus what they depend on externally. This structural difference reveals which company is better positioned for sustainable growth.

The Vertical Integration Advantage: A Decisive Factor

The critical differentiator between these two competitors is their control over essential infrastructure assets. Iren maintains a vertically integrated model spanning land ownership, electrical infrastructure, and GPU allocation. This comprehensive control extends all the way to electrical substations, giving the company direct management of power supply chains.

Applied Digital operates a more asset-light approach, owning land but relying more heavily on third-party suppliers for electricity and power distribution. This dependency creates potential bottlenecks and limits cost optimization.

Vertical integration provides Iren with two strategic advantages: first, the ability to maintain tighter cost controls across operations; second, the capacity to scale data center deployments faster without waiting for external parties to build out infrastructure.

Financial Projections Show Diverging Paths

The earnings outlook for the two companies diverges sharply. Analysts project Iren will deliver a 175% increase in earnings per share during fiscal 2026, reaching approximately $1.07 per share. The company is transitioning from growth-phase investments into a profitable operating model.

Applied Digital, by contrast, is expected to report a net loss of $0.45 per share for the year. While the company continues to pursue growth opportunities, profitability remains elusive in the near term.

Which Company Better Rewards Long-Term Investors?

Both Iren and Applied Digital are riding waves of structural demand for AI infrastructure. Both have secured multibillion-dollar commitments from credible counterparts. Yet their different approaches to asset ownership and infrastructure control suggest different risk-reward profiles.

Iren’s integrated business model, combined with its transition toward significant earnings growth, presents a stronger foundation for investors seeking exposure to the data center infrastructure buildout. Applied Digital’s external dependency structure, though potentially offering flexibility, introduces execution risks that profitability timelines remain uncertain.

The data center infrastructure wave will likely create winners across both players, but Iren’s ownership structure and earnings trajectory appear better positioned to deliver sustained shareholder returns over the coming decade.