Applied Digital Has $36 Billion in Contracted Revenue. Wolfspeed Has the Better Stock Chart.
One builds the AI factories, the other makes the chips that power them, yet the market is rewarding only one while punishing the other. Understanding why reveals a deeper split in how investors are valuing the infrastructure boom right now.
Applied Digital (NASDAQ:APLD) builds AI data centers. Wolfspeed (NYSE:WOLF | WOLF Price Prediction) makes power chips that go inside them. The market has moved them in opposite directions: Applied Digital is down 15.8% year to date, while Wolfspeed is up 61.7%. Their business models explain the split.
Applied Digital Owns the Buildings and the Bills
HPC Hosting rents AI factory facilities to hyperscalers, including CoreWeave (NASDAQ:CRWV). Data Center Hosting serves crypto miners with 286 megawatts in North Dakota. As of August 31, 2026, the company reported approximately 1.41 GW of IT capacity reserved for servers across five campuses. That adds up to approximately $36 billion of contracted revenue over the initial base terms, covering 15-year leases. (We rounded up seven other non-chipmaker names riding the same data center expansion in a free report available here).
Fiscal Q1 2027 revenue came in at $341.88 million, beating the $124.57 million estimate. Of that total, $183.5 million came from one-time tenant fit-out work. CEO Wes Cummins argued that “every new restriction elsewhere” makes his facilities harder to replicate. The stock fell 19.43% over one year. The company is unprofitable, with trailing-12-month EPS of −$1.65. It has approximately $6.4 billion of debt and spent $2.07 billion on capital projects in a single quarter.
Wolfspeed Sells the Chips That Tame Power
Silicon carbide is a tough semiconductor material. It handles higher voltages and heat than ordinary silicon and wastes less energy when converting power in EVs, data centers, and solar systems. Power Products, Wolfspeed’s finished chips, brought in $106.3 million in fiscal Q4. Materials Products, its raw wafers, fell to $43.3 million from $78.4 million. The company is moving to 200 mm wafers. Bigger wafers yield more chips per production run, which lowers unit costs once the factories fill up.
Wolfspeed emerged from Chapter 11 in September 2025 and adopted fresh-start accounting. Its available price history starts September 29, 2025, so this year’s gain is measured from a post-emergence floor. AI data center revenue more than doubled in fiscal 2026. Non-GAAP gross margin was negative 19.9%. Barron’s also highlighted a Pentagon financing deal.
Different Risks Run on Different Clocks
| Lens | Applied Digital | Wolfspeed |
|---|---|---|
| Role in the AI stack | Landlord for GPU facilities | Power chip and wafer supplier |
| Revenue visibility | 15-year take-or-pay rents | Design wins and qualifications |
| Main risk | Financing and construction | Factory use |
| Market cap | $7.2 billion | $1.6 billion |
Applied Digital’s backlog pays out slowly, and construction cash goes out fast. Investors are pricing in the execution risk. Wolfspeed’s chart reflects relief over a cleaner balance sheet and a low starting price. Management put gross-margin breakeven near an “800 million annual run rate,” which is well above current sales.
What Each Has to Prove Before the Gap Closes
For Applied Digital, watch whether it brings over 600 megawatts into service within 12 months. The next test is securing affordable financing for Polaris Forge 3 and Delta Forge 1 and 2.
For Wolfspeed, the question is whether 800-volt data center designs and 200 mm qualifications bring in enough volume to fill the Mohawk Valley fab. Fiscal Q1 guidance of $140 million to $160 million shows how far it still has to go. Applied Digital is a long-term infrastructure owner. Wolfspeed is a turnaround still burning cash. Both need another quarter to show what they can do.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
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