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.
| Applied Digital | Cisco Systems | Coherent Corp | |
|---|---|---|---|
| Moat rating | none The FY2026 10-K (filed 2026-07-29) shows contracted revenue, not a demonstrated competitive edge. About 1,410 MW is leased under 15-year take-or-pay, non-cancellable base terms worth about $36.2 billion, but only about 100 MW of the roughly 1.5 GW that is contracted and either operating or under construction was operating and earning revenue at May 31, 2026, and Item 1A says "lessees may have the right to terminate applicable leases if there are significant delays in construction." Item 1A also concedes "We do not have the resources to compete with larger providers of similar products or services at this time," and the Competition section names 13 power-advantaged developers the company competes with. Signed leases give revenue visibility, but the filing does not show a durable advantage. | narrow The FY2025 10-K shows a moat that still pays but no longer compounds: total gross margin of 64.9% and remaining performance obligations of $43,533 million (up 6%) against a Networking product category that fell from $34,570 million in fiscal 2023 to $29,229 million in fiscal 2024 to $28,304 million in fiscal 2025, and a product gross-margin bridge in which 'Product pricing' subtracted 1.6 percentage points. All of the reported category growth came from Splunk-carrying lines - Security +59% and Observability +26%. Real and durable, but bounded: narrow, not wide. | narrow The FY2026 10-K (filed 2026-08-14) claims 'Coherent is a global leader in photonic technology' whose 'broad photonic technology platform is foundational to the performance and scalability of AI datacenters', and the NVIDIA relationship hardens it — a 'multi-year strategic agreement with NVIDIA ... includes a multi-billion-dollar purchase commitment ... as well as future access and capacity rights', plus a $2 billion NVIDIA equity investment. But the largest line remains standardized, contested transceivers where LightCounting's May 2026 vendor landscape reports 'Eoptolink reached the #2 rank for the first time in 2025, surpassing Coherent.' Real advantages, contested largest market: narrow, not wide. |
| Moat type | none The 10-K claims three advantages: power-advantaged sites (it believes securing power and interconnection ahead of demand is 'the principal constraint on new HPC capacity and a core differentiator for us from many of our competitors'), a standardized 'franchise-style' design, and hyperscaler master service and master telecom service agreements 'that are difficult to obtain.' The filing does not show any of them to be durable. Its Competition section says competition 'centers on securing and developing sites with access to large-scale, reliable, and cost-competitive power and interconnection' and names 13 power-advantaged developers going after the same leases, and Item 1A concedes it lacks the resources to compete with larger providers. Signed leases are take-or-pay and non-cancellable, so a tenant leaving for convenience owes 'the full remaining contractual value,' but that is contractual lock-in on each lease rather than a moat source, so no moat type is assigned. | switching costs The durable piece is the contracted annuity attached to installed equipment: total remaining performance obligations of $43,533 million, of which $21,961 million is services and $21,810 million is long-term (recognised beyond twelve months), carried at a services gross margin of 68.5% that has risen for three consecutive years from 66.4% and 68.1%. Customers keep paying for support on gear they already run. | intangibles ip The FY2026 10-K grounds the advantage in the technology platform itself: 'Coherent is a global leader in photonic technology. Our broad photonic technology platform is foundational to the performance and scalability of AI datacenters. AI runs on compute, but it scales on optical connectivity' — materials-to-device photonics know-how, including the indium phosphide capacity it is expanding in Sherman, Texas 'to address our increased customer demand and industry-wide shortage.' |
| Leadership | behind The 10-K makes no leadership claim and gives no ranking or share figure. Item 1A concedes "We do not have the resources to compete with larger providers of similar products or services at this time" and that some rivals have "substantially greater liquidity and financial resources than we do." Its Competition section places APLD against established operators (Digital Realty, Equinix), hyperscalers that build their own capacity, independent developers and 13 named power-advantaged developers (IREN, Cipher Digital, TeraWulf, Hut 8, Riot, CleanSpark, HIVE, Core Scientific, Bitdeer, Galaxy Digital, Fermi, Keel Infrastructure, MARA). | co leader The 10-K names no competitor and discloses no market share anywhere in Management's Discussion and Analysis. The positional facts it does give are scale and direction: Networking product revenue of $28,304 million in fiscal 2025 - by far the largest of its four categories - but down $6.3 billion from fiscal 2023, with channel partner financing volume falling from $32.1 billion to $27.1 billion to $24.9 billion across fiscal 2023-2025. | co leader The FY2026 10-K asserts 'Coherent is a global leader in photonic technology', but in its dominant product category LightCounting's May 2026 update reports 'Eoptolink reached the #2 rank for the first time in 2025, surpassing Coherent' behind leader Innolight — a top-tier but not #1 position in transceivers. |
| Pricing power | weak Item 1A says "Due to the limited number of hyperscalers, we expect that a limited number of customers will continue to account for a high percentage of our revenue for the foreseeable future," and that if customers' equipment usage declines or they discontinue use of its facilities, APLD "may be compelled to lower our lease prices in some instances or risk losing a significant customer." One customer was 59% of FY2026 revenue from continuing operations. Take-or-pay, non-cancellable terms protect contracted revenue over the base term, and Note 19 reports a $39.1M HPC Hosting segment profit on $385.3M of segment revenue in FY2026, but those terms are agreed with a small group of concentrated buyers. | moderate The product gross-margin bridge attributes fiscal 2025's 0.2-point improvement to productivity (+2.0 points) and mix (+1.1 points) while 'Product pricing' subtracted 1.6 points; a legal dispute with a supplier cost a further 0.8 points. Total gross margin of 64.9% (product 63.7%, services 68.5%) is held by cost and mix, not by price. | moderate Fiscal 2026 Datacenter & Communications segment profit grew faster than revenue (47 percent versus 40 percent per the 10-K), and the filing cites an 'industry-wide shortage' behind its indium phosphide expansion; against that, the transceiver category's standardization and rising rival capacity keep pricing power moderate rather than strong. |
| Summary | Applied Digital designs, builds and operates purpose-built, liquid-cooled HPC data centers, which it calls 'AI factories', and leases the capacity to CoreWeave and investment-grade hyperscalers. At May 31, 2026 its 10-K lists five campuses (Polaris Forge 1-3 and Delta Forge 1-2) with about 1,410 MW contracted under roughly 15-year take-or-pay, non-cancellable leases worth about $36.2 billion over the base terms. The filing claims three sources of advantage: it controls power-advantaged sites, it uses a standardized 'franchise-style' design built to deliver about 150 MW in about 14 to 18 months, and it holds hyperscaler master agreements that are 'difficult to obtain.' The same document shows how early the company is. About 100 MW was operating and earning revenue. One customer was 59% of FY2026 revenue from continuing operations. It competes with Digital Realty, Equinix, hyperscalers that build their own capacity and 13 named power-advantaged developers, and it concedes that it lacks the resources to compete with larger providers. Signed leases give long-dated revenue visibility, but the filing does not show a durable competitive advantage. | The installed base still switches slowly - but the filing does not claim it is winning the AI datacenter on the strength of that base. The fiscal 2025 Networking decline is attributed to 'product shipments returning to normalized levels during the first half of fiscal 2025 from the elevated levels ... in the first half of fiscal 2024', to servers, and to 'a decline in campus switching' - normalisation, not disclosed share loss, so the whitebox/Arista thesis is not something this 10-K either confirms or denies. What the filing does disclose is the shape of the AI dollar Cisco is actually winning: Americas service provider and cloud growth 'driven by AI infrastructure revenue from webscale customers', funded by additional purchase commitments 'related to manufacturing Cisco Silicon One and other products to meet demand from webscale and other customers', which 'significantly increased our supply chain exposure, which has resulted in negative impacts to our product gross margin in recent periods and may result in further negative impacts in future periods'. Enterprise switching earns 63.7% product gross margin; webscale silicon costs margin to serve. The moat is intact where the annuity is and thin where the growth is. | AI datacenter optics is now the engine: Datacenter & Communications revenue rose 40 percent to $5,275 million in fiscal 2026 with segment profit up 47 percent to $1,330 million, 'driven primarily by transceivers', and NVIDIA both committed multi-billion-dollar purchases with capacity rights and invested $2 billion in the company — while the transceiver league table stays contested, with LightCounting placing Coherent third behind Innolight and Eoptolink. |
| Chain position | Developer and landlord of power-advantaged, liquid-cooled AI data-center capacity, leased long-term to CoreWeave and investment-grade hyperscalers. | Supplies networking into AI datacenters: the 10-K ties Americas service provider and cloud growth to 'AI infrastructure revenue from webscale customers' and to Cisco Silicon One manufacturing commitments. | Optical-connectivity supplier to AI datacenters — transceivers, datacenter interconnect and lasers — now with NVIDIA purchase commitments and equity on its cap table. |
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| Long-horizon vote | -0.20 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. |