AI Data Center Cap Rates: Neoclouds vs. Data Center REITs

Applying the cap rate to AI data centers

AI data center companies describe themselves in real estate terms. They talk about megawatts, contracted backlog, and multiyear take-or-pay deals. Real estate investors price that kind of story with one number: the cap rate, which is net operating income (NOI) divided by asset value. NOI excludes interest expense, depreciation, taxes, and working capital changes. The cap rate tells you the yield you are buying and lets you set it against the risk-free rate.

I used Daloopa’s Model Context Protocol (MCP) in Claude to query the financial data for this comparison. The MCP is the verified data layer an LLM uses to query Daloopa’s structured financials, with each fundamental figure hyperlinked back to the source filing. The queries covered trailing adjusted EBITDA, debt, cash, and share counts for four AI infrastructure names (CoreWeave, Nebius, IREN, and Applied Digital) and four REITs (Equinix, Digital Realty, Prologis, and Realty Income). Using those financials, I computed implied cap rates and their spread to the 10-year Treasury as of October 15th and at every year-end back to 2021.

The result is a paradox. Data center REITs trade at the tightest spreads to Treasuries in five years. CoreWeave trades at a wider spread than any REIT in the sample. Both make sense once you account for one line item: the cost of maintaining the asset.

Analysis of cap rates

Table 1: Implied cap rates as of October 15th, 2026

Source: Daloopa (fundamentals), IBKR (share prices), CBOE (10Y yield). EBITDA links go to the most recent quarter in the TTM sum. Enterprise value and all rates are computed; see notes 1 to 4.

On reported EBITDA, CoreWeave has the highest yield on the page. Its implied cap rate is 6.82%, +173 bp over the 10-year. Q2 adjusted EBITDA was $1,510 million. Annualized, the run rate cap rate is 9.36%, +427 bp over the 10-year.

The REITs sit between 4.21% and 6.57%. Equinix and Digital Realty, the data center landlords, are at the low end. Both are below the 5.09% Treasury yield.

Nebius, IREN, and Applied Digital are below 2%. Their EBITDA is still ramping or, for IREN, decreasing as bitcoin mining winds down: $19.2 million in the June quarter versus $91.7 million three quarters earlier. Their enterprise values include capacity that is not yet producing EBITDA. I covered that unbuilt exposure in my DayOne IPO analysis.

How depreciation changes the yield

A cap rate works for real estate because the asset barely wears out. A powered shell lasts 30 years or more. A GPU server is depreciated over about six years. That gap shows up directly in the numbers.

Table 2: Maintenance burden, trailing four quarters

Source: Daloopa. Links go to the most recent quarter in each TTM sum. APLD and IREN TTM periods follow their fiscal calendars; see note 5.

Equinix spends $284 million a year on recurring capex, 5.7% of EBITDA. CoreWeave’s depreciation is $3,991 million, 91% of EBITDA. Nebius depreciates twice what it earns.

Strip that out and CoreWeave’s economic cap rate is 0.64%. Equinix is 3.97% and Digital Realty is 3.89%. Growth does not close the gap because depreciation scales with deployed capital. CoreWeave’s Q2 depreciation of $1,393 million consumed most of its Q2 EBITDA. On a run rate basis the economic cap rate is 0.73%.

The 6.8% headline is an EBITDA yield on assets that depreciate, closer to an equipment lessor’s gross yield than to a property yield. The spread over Treasuries reflects depreciation, the refinancing of $31.4 billion of debt, and customer concentration.

What sits inside adjusted EBITDA

Every cap rate in Table 1 uses the company’s own adjusted EBITDA. The four AI names build that number differently, and the differences are large relative to the yields.

Table 3: What sits inside adjusted EBITDA, trailing four quarters

Source: Daloopa. Links go to the most recent quarter in each TTM sum; Applied Digital other adjustments cover the three quarters it reported them. Cap rate less stock comp uses the Table 1 enterprise value; see note 9.

CoreWeave’s bridge is the most conventional of the four. It starts from net loss and adds back depreciation, net interest, taxes, stock compensation, and small acquisition costs. Stock comp of $619 million is 14% of adjusted EBITDA, close to Equinix at 11%. The item the bridge does not show is capitalized interest: CoreWeave capitalized $322 million of interest into construction over the last four quarters. That cost skips both interest expense and EBITDA and comes back later as depreciation. Data center rent stays inside EBITDA as operating lease cost ($500 million in Q2), which is why operating leases sit outside EV.

Nebius reports two EBITDAs. Group adjusted EBITDA of $376 million carries $161 million of losses at Avride and TripleTen. The core AI cloud segment earned $537 million. On the segment number the cap rate is 1.01% instead of 0.70%. The adjustments are also heavier: stock comp is 50% of group adjusted EBITDA and restructuring and other one-off expenses added back another $104 million, in three of the last four quarters.

IREN’s adjusted EBITDA is mostly a bitcoin number. Bitcoin mining was 82% of TTM revenue. AI cloud revenue passed mining only in the June quarter: $70.5 million versus $66.7 million. The bridge adds back $639 million of impairments and removes $559 million of unrealized gains on financial instruments. Stock comp equals 83% of adjusted EBITDA.

Applied Digital’s adjustment is structural. Its adjusted EBITDA excludes the operating loss of its cloud services business, $90 million over the last three quarters, so the number reflects the landlord business only. Its non-GAAP bridge also excludes $264 million of stock comp, 1.5 times adjusted EBITDA.

Treating stock comp as an operating cost puts everyone on the same basis. CoreWeave’s cap rate falls from 6.82% to 5.86%. Equinix goes from 4.21% to 3.76%. Nebius and IREN go to roughly zero and Applied Digital goes negative. CoreWeave still ranks first and Equinix second, though the order among Nebius, IREN, and Applied Digital shifts. The gap between CoreWeave and Equinix narrows. Among the AI names, CoreWeave’s EBITDA is the only one that looks like NOI.

Spreads against their own history

Table 4: Implied cap rate minus 10-year Treasury yield (basis points)

Source: Daloopa (fundamentals), IBKR (unadjusted closes), CBOE (10Y yield). Year-end columns use fiscal-year EBITDA and the year-end balance sheet; see notes 6 and 7.

In December 2021, with the 10-year at 1.51%, every REIT in the set traded 160 to 281 basis points over Treasuries. As of October 15th, the 10-year is 5.09%, Equinix trades at -88 bp and Digital Realty at -74 bp.

That puts the data center REITs 146 and 160 basis points inside their own 2021 to 2025 averages. Prologis is 75 basis points inside. Realty Income, the closest thing to a bond in the group, is 53 inside. Buyers of powered shells are accepting a yield below the risk-free rate because they expect NOI to grow into the price. Equinix TTM EBITDA has already moved from $4,530 million in FY2025 to $4,975 million through Q2 2026.

The neoclouds moved the other way. CoreWeave’s implied cap rate rose from 5.44% on June 30th to 6.82% on October 15th on the same trailing EBITDA. The stock fell from $99.54 to $69.69. Its spread widened from +102 bp to +173 bp while the Treasury yield rose 67 basis points. Relative to Treasuries, the market bid up the shell and marked down the compute in the same quarter.

What it means

The bull case. CoreWeave’s run rate EBITDA yield of 9.36% is the highest in the group. Backlog of $104.2 billion is 1.6x enterprise value. If contracts recover GPU cost plus a return within their terms, depreciation is paid for by the customer and anything left at the end is upside.

The bear case. After depreciation, the economic cap rate is below 1%. A 6% cap rate on a 30-year building and a 6.8% EBITDA yield on a six-year server are not the same asset. A REIT refinances against collateral. A GPU lender’s collateral declines every quarter.

The middle ground. Applied Digital leases powered capacity to AI tenants and reports NOI like a landlord: $39.9 million of HPC hosting NOI in its fiscal Q4. Its run rate cap rate is 2.75%, below Digital Realty’s 4.35%. On run rate earnings the market values it more richly than Digital Realty. Each case depends on different assumptions about what the asset is worth after its first contract.

Cap rates force one question onto AI infrastructure: what does the asset look like in year seven? For the REITs the answer is a building with a tenant. For the neoclouds the answer depends on the next contract.