Compare moats
Up to three covered companies, band by band. Every call is a curated editorial judgment, never a disclosed figure — and every band carries its cited basis.
| Adobe | NetApp | Applied Materials | |
|---|---|---|---|
| Moat rating | narrow The FY2025 10-K's own Competition section says the markets for Adobe's solutions are characterized by 'limited barriers to entry, short product lifecycles, customer price sensitivity ... and the frequent entry of new solutions or competitors', and Item 1A adds that Adobe 'face[s] increasing competition from companies offering generative and agentic AI solutions, including but not limited to prompt-based and multi-modal creation and editing, document productivity and understanding' - the two categories that carry the Digital Media segment. That disclosed contestability caps the moat below wide, while the same filing's industry-standard app designations and 89% consolidated gross margin keep it well above none. | narrow The FY2026 10-K shows a real, durable lock but not an unassailable one. On the durable side: "Our cloud storage services are based on the same ONTAP data management software that underpins our on-premises ONTAP storage infrastructure offerings", and the same filing's income statement shows the company holding a gross margin near 71% across all three reported years - $4,433M on $6,268M in FY2024, $4,613M on $6,572M in FY2025 and $4,899M on $6,925M in FY2026 - while revenue grew from $6,268M to $6,925M and income from operations widened from 19% to 24% of net revenues. Holding that margin through the memory-cost shock the same filing discloses is the commercial evidence the lock is worth something. On the limiting side, the filing says competition "is intense", that in public cloud "customers may choose native cloud services that are consumed as operating expenses", and that "New competitors or alliances among existing competitors could emerge and quickly gain significant market share" - and IDC's 1Q26 external-storage tracker (Blocks & Files, 2026-06-16, cited on the AFF/ASA product row below) ranks NetApp second behind Dell, not first. | wide The FY2025 10-K (filed 2025-12-12) grounds a wide moat on three reinforcing pillars: (1) scale IP — 'more than 23,500 active patents in the United States and other countries' and $3.57B of fiscal 2025 RD&E spend that 'must generally enable us to deliver new products and technologies before the emergence of strong demand'; (2) portfolio breadth — 'the semiconductor capital equipment industry's most comprehensive portfolio of products', letting Applied 'combine, co-optimize and integrate our technologies to develop highly differentiated solutions'; (3) an installed-base annuity — the AGS segment monetizes 'our large, global installed base of semiconductor and other equipment' with transactional and subscription services, spares and factory automation software, carrying a $7,141M backlog (48% of the company's $15,002M total) at fiscal year-end 2025. Company gross margin expanded three straight years (46.7% FY2023, 47.5% FY2024, 48.7% FY2025) while this played out. |
| Moat type | switching costs The 10-K frames Adobe's differentiation as an integrated ecosystem the customer's work lives inside: Creative Cloud Pro subscribers get 'cloud storage to easily sync, access, collaborate and share their work, files and assets', the AI platform offers a choice of models 'without the friction of switching between workflows and platforms', and on the enterprise side 'Our competitive differentiation comes from the increased value we provide customers by integrating the Adobe Experience Platform with our comprehensive set of solutions'. 96% of FY2025 revenue is subscription, with $22.52B of remaining performance obligations, up 13% year over year. | switching costs The FY2026 10-K makes the source of the advantage explicit and it is the cost of leaving the data-management layer, not a network or a patent estate. The same ONTAP software runs the on-premises arrays and the cloud services ("Our cloud storage services are based on the same ONTAP data management software that underpins our on-premises ONTAP storage infrastructure offerings"), and the AFF family "allows customers to connect to clouds for more data services, data tiering, caching, and disaster recovery". A customer's volume layout, snapshot and replication workflow and operating tools therefore carry from the array into Azure, AWS and Google rather than being abandoned at the cloud boundary — the filing describes NetApp as "the only provider of enterprise-grade storage services natively embedded in the world's largest public cloud providers", so the usual moment of escape is instead the moment the relationship renews. | intangibles ip The 10-K itself names IP as the competitive foundation: 'Protection of our technology assets through enforcement of our intellectual property rights, including patents, is important for our competitive position', backed by 'more than 23,500 active patents' plus trademarks, know-how, trade secrets and copyrights, and $3,570M of fiscal 2025 RD&E ($3,042M inside Semiconductor Systems alone). A strong secondary switching-cost layer is also documented: the risk factors cite the difficulty of 'securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions with customers' as a decisive competitive factor — once a tool is the record tool for a node, displacement is the exception — and AGS service/spares revenue is tied to the installed base. |
| Leadership | clear leader In the segment that is 74% of FY2025 revenue ($17.65B of $23.77B) the 10-K asserts leadership outright: Illustrator 'our industry-standard vector graphics app', After Effects 'our industry-standard motion graphics and visual effects app', Acrobat 'a leading document productivity app', and 'category and brand leadership' in the Competition section. The claim does not extend to the whole company - the same section says the marketing solutions 'face broad competition from large, established enterprise software and cloud companies'. | co leader IDC's 1Q26 external enterprise storage systems tracker, as reported by Blocks & Files on 2026-06-16 (cited in full on the AFF/ASA product row below), ranks NetApp second worldwide behind Dell and ahead of Everpure, Huawei and HPE, attributing the placing to "its growing all-flash business and cloud-integrated data management". Second of five ranked vendors, in a market whose leader is someone else, is a shared front rank rather than an owned one - and the distinct claim NetApp makes in the FY2026 10-K is positional rather than volumetric: being "the only provider of enterprise-grade storage services natively embedded in the world's largest public cloud providers". | clear leader Self-declared basis, not an independent rank: the 10-K's opening sentence claims Applied 'is the leader in the materials engineering solutions used to produce virtually every semiconductor in the world' and repeatedly claims 'the semiconductor capital equipment industry's most comprehensive portfolio'. The filing names no competitor and states no market-share figure — it acknowledges rivals ranging 'from small companies that compete in a single region... to global, diversified companies' and says only that 'many of our products have strong competitive positions'. Leadership claim is scoped to materials engineering (Applied sells no lithography). |
| Pricing power | strong Per the same 10-K's segment table, Digital Media earned a 95% gross profit margin in FY2025 (96% FY2024, 95% FY2023) and consolidated gross margin held at 88%/89%/89% across FY2023-FY2025 while revenue grew 11% to $23.77B. 96% of revenue is subscription and remaining performance obligations reached $22.52B, up 13%. Item 1A's warning of 'downward pressure on pricing and gross margins' has not shown up in realized margin. | moderate It holds price rather than raising it. On the figures filed with the FY2026 10-K, gross margin was 70.7% of revenue in FY2024 ($4,433M on $6,268M), 70.2% in FY2025 ($4,613M on $6,572M) and 70.7% in FY2026 ($4,899M on $6,925M) - flat across three years in which revenue grew from $6,268M to $6,925M - and it held that level while absorbing a component-cost shock. It is no stronger than that because the filing's own risk factor lists "competitive pricing, customer price sensitivity" and "pricing and discounting pressures" among the drivers of gross margin, and discloses that the company "experienced inflationary pressure and supply chain constraints beginning in the second half of fiscal 2026, resulting in increased costs for memory and other components, which have affected our gross margins" - a cost shock it is absorbing rather than fully passing on. | strong MD&A attributes the FY2025 gross-margin expansion explicitly to price: margin rose 1.2 points to 48.7% 'primarily driven by higher net revenue, favorable changes in customer and product mix, an increase in average selling prices, and lower material and manufacturing costs' — the third consecutive annual increase (46.7% FY2023, 47.5% FY2024, 48.7% FY2025), with Semiconductor Systems segment gross margin at 54.2%. Counterweight from the same filing: a 'highly concentrated customer base' (two customers ~19% and ~15% of net revenue) whose members 'may seek pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us'. |
| Summary | Adobe's durable advantage is the cost of leaving rather than any disclosed market share. Its FY2025 10-K calls Illustrator 'our industry-standard vector graphics app' and After Effects 'our industry-standard motion graphics and visual effects app', describes Acrobat as 'a leading document productivity app', and sells them as one subscription ecosystem where assets, workflows and collaboration are cloud-resident. The economics follow: Digital Media earned a 95% gross profit margin on $17.65B of FY2025 revenue, 74% of the company. The same filing is unusually candid about the limits, calling its markets characterized by 'limited barriers to entry' and warning that competition will 'continue to intensify' with named generative and agentic AI entrants in both creation and document productivity - so the moat reads narrow rather than wide, held today by realized pricing and switching costs rather than by structural protection. | NetApp sells storage hardware but the asset is ONTAP, the data-management software that has run its arrays for over three decades and now also runs inside the three largest public clouds as a first-party service. The FY2026 10-K organises the company into two segments, Hybrid Cloud (AFF and ASA all-flash arrays, AFX for AI workloads, FAS hybrid-flash, E/EF-Series, StorageGRID object storage) and Public Cloud (Azure NetApp Files, Amazon FSx for NetApp ONTAP, Google Cloud NetApp Volumes, Cloud Volumes ONTAP), and states that both rest on the same ONTAP software. That is the whole argument: an enterprise that has standardised its snapshots, replication and multiprotocol access on ONTAP carries those habits with it when it moves workloads to a hyperscaler, and NetApp is paid on both sides of the move. The evidence that the lock has commercial value is the margin's steadiness: across the three years the FY2026 10-K reports, gross margin sat at 70.7%, 70.2% and 70.7% of revenue ($4,433M on $6,268M, $4,613M on $6,572M, $4,899M on $6,925M) while revenue grew, and the filing's own percentage-of-revenue table shows no mix shift doing that work - product and services held near 46% and 54% of revenue throughout. The limits are equally in the filing. NetApp is second, not first: IDC's 1Q26 tracker puts it behind Dell in external enterprise storage, and the 10-K's competition section concedes that cloud providers are simultaneously partners and rivals, that consumption models "may reduce overall demand for our traditional on-premises offerings sold through a capital expenditure (capex) model", and that alternative architectures "may reduce or eliminate demand for some of our offerings". Component exposure is real too: the filing discloses "inflationary pressure and supply chain constraints beginning in the second half of fiscal 2026, resulting in increased costs for memory and other components, which have affected our gross margins", and names NAND among the components whose supply can tighten. This is a durable second place built on software stickiness, not a structural monopoly. | Applied Materials describes itself in its FY2025 10-K as 'the leader in the materials engineering solutions used to produce virtually every semiconductor in the world', selling wafer-fab equipment across patterning, transistor and interconnect fabrication (deposition/etch for 3D transistors), optical and eBeam process control, and advanced packaging. Fiscal 2025 net revenue was $28,368M: Semiconductor Systems $20,798M at a 54.2% gross margin (up from 52.9% FY2024 and 52.0% FY2023), AGS services $6,385M, and Corporate and Other (including display equipment) $1,185M. Within Semiconductor Systems, foundry/logic was 67% of revenue, DRAM 26%, NAND 7%. The moat mechanics the filing documents: 23,500+ active patents and $3.57B annual RD&E that must land tools with customers 'during early-stage technology selection'; DTOR/PTOR tool-of-record incumbency (cited in risk factors as the hard-to-win competitive position); and an AGS installed-base annuity whose backlog ($7,141M) now rivals the equipment backlog. The filing is equally clear about the moat's edges: 'Substantial competition exists across all the segments of our business'; two customers were approximately 19% and 15% of fiscal 2025 net revenue; ~89% of revenue is from outside the United States; and U.S. export controls on China 'have limited the market for certain of our products and services, adversely impacted our revenues and increased our exposure to foreign and Chinese domestic competition'. |
| Chain position | An AI-application layer company that both builds its own commercially safe Firefly foundation models and licenses 'an extensive ecosystem of third-party models', distributing generative AI into creative, document and marketing workflows. | NetApp sits between the memory supply and the enterprise data centre. Upstream, the FY2026 10-K says "Third-party component costs make up a significant portion of our product costs" and singles out NAND as hard to manage "if supplies of certain components, including NAND, become limited relative to demand". Downstream, the hyperscalers are channel, partner and rival at once: the filing states "We both partner with and compete against cloud service providers through our cloud-based software and services offerings", while Azure NetApp Files, Amazon FSx for NetApp ONTAP and Google Cloud NetApp Volumes are delivered as those clouds' own natively embedded services. Distribution is a mix of direct sales and "an ecosystem of partners, including the leading cloud providers". | Upstream chokepoint of the AI-compute supply chain: Applied's tools fabricate chips for 'artificial intelligence (AI) and data center servers' among other end markets, selling into foundry/logic (67% of Semiconductor Systems revenue), DRAM (26%) and NAND (7%). Concentration cuts both ways — two customers were ~19% and ~15% of FY2025 net revenue, ~89% of revenue is non-U.S., and the customer base is 'geographically concentrated, particularly in China, Taiwan and Korea', with U.S. export controls on China constraining the addressable market and feeding Chinese domestic-equipment competition (all per the FY2025 10-K). |
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| Long-horizon vote | +0.24 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.42 at weight 0.20 · swarm bullish Editorial prior, not backtested. |