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 | Duolingo | Cisco Systems | |
|---|---|---|---|
| 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 Wide is ruled out by the company's own Item 1A, which concedes "low switching costs" and that "Low barriers to entry allow start-up companies with lower costs and less pressure for profitability to compete with us." It sits well above none because Q4 DAUs grew 30% to 52.7M, DAU/MAU rose to 39.6% from 34.7%, and marketing took only 12% of FY2025 revenue, though that ratio was flat versus FY2024 and gross margin fell to 72.2% from 72.8%. It stays narrow rather than eroding because Q1 FY2026 DAUs and paid subscribers each grew 21%. | 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. |
| 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. | intangibles ip The intangible is the consumer brand, not patents: Item 1 says "For many, Duolingo has become synonymous with language learning" and that growth is "organic, primarily driven by word-of-mouth and brand buzz," while the IP section discloses only "two patent applications." Switching costs are ruled out by the filing's own "low switching costs" caption. The data-scale support is the filing's own characterisation, and the brand is admittedly damageable: an April 2025 AI memo "may have contributed to unfavorable publicity, adverse impacts on the Company's brand and social media presence, and a deceleration in user growth." | 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. |
| 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). | clear leader Leadership holds within consumer app-based language learning, anchored on one externally checkable claim in Item 1: the app "is also the top-grossing app globally in the Education category on both Google Play and the Apple App Store," with "over 250 total language courses to more than 130 million monthly active users" as of 2025-12-31. The broader "leading market position" claim is the filing's own characterisation, and no third-party share statistic appears anywhere in the 10-K, so a band is recorded and no percentage transcribed. The band does not extend to assessment, literacy, math, music, chess or offline learning, where the filing claims no position. | 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. |
| 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. | weak Every mechanism is cost, mix or volume, never price. FY2025 gross margin fell to 72.2% from 72.8% on "increased AI costs used in features like Video Call" and an advertising mix shift; the Q1 FY2026 gain to 73.0% came from "continued reductions in per-unit AI costs," with margin guided to about 71.0% in Q2 and "approximately 69.0% by Q4." The filing concedes it "may not be able to fully offset such higher costs through price increases." Subscription revenue rose 44% to $873.4 million "primarily due to an increase in the average number of paid subscribers," and the cap is self-imposed: "We intentionally do not put our learning content behind a paywall." | 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. |
| 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. | Duolingo's moat is essentially one asset — a consumer brand strong enough that the filing claims people "search for the term 'Duolingo' much more often than 'learn Spanish'" — sitting on real but not defensive scale. It converts into economics through organic acquisition: sales and marketing took 12% of FY2025 revenue while Q4 DAUs grew 30% to 52.7 million and DAU/MAU rose to 39.6% from 34.7%. It is not wide, because the company supplies both disqualifiers itself: "low switching costs" and "Low barriers to entry allow start-up companies with lower costs and less pressure for profitability to compete with us." Width and pricing power diverge: Duolingo will not price against its own free product, grows subscription revenue by adding subscribers ($873.4 million, up 44%), and guides gross margin down to roughly 69% by Q4 FY2026 "as AI feature use expands in our products." | 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. |
| Chain position | Developer and landlord of power-advantaged, liquid-cooled AI data-center capacity, leased long-term to CoreWeave and investment-grade hyperscalers. | A consumer AI application and net buyer of model inference. The filing ties its margin line directly to inference cost, attributing the FY2025 subscription gross-margin decline to "increased AI costs used in features like Video Call" and guiding margin to approximately 69.0% by Q4 FY2026 "as AI feature use expands," while the Q1 FY2026 beat came from "reductions in per-unit AI costs." | 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. |
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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 bearish Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. |