CTEs vs Subqueries: SQL Optimizers Treat Them Almost Identically

A common belief among developers is that Common Table Expressions (CTEs) are inherently faster than subqueries, but this is largely a myth in modern SQL Server and PostgreSQL. Both CTEs and derived tables are typically expanded into the same relational tree by the query optimizer, producing identical execution plans and I/O costs. However, when a CTE is referenced multiple times within a single query, SQL Server may execute its underlying logic more than once or create a Lazy Spool in tempdb, adding overhead. In such cases, using a temporary table with an explicit clustered index is recommended for handling large, multi-million-row datasets. Understanding these internals helps engineers make more informed decisions when designing data pipelines.