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.
| AppLovin | Palo Alto Networks | Applied Digital | |
|---|---|---|---|
| Moat rating | narrow The filing's own words support a narrow moat. Auctions run 'at vast scale and at microsecond-level speeds,' revenue is earned only 'when our advertisers achieve their return on advertising spend targets,' and FY2025 adjusted EBITDA margin was 82.3%. What limits the width: clients 'are not required to enter into long-term agreements' and 'Substantially all of the Company's contracts with customers are cancelable at any time'; the solutions 'primarily operate in the mobile app ecosystem and specifically mobile gaming'; and distribution runs through 'the Apple App Store, the Google Play Store, and Meta' while AppLovin relies 'in part on IDFA.' | narrow Real but bounded. The FY2025 10-K's own Competition section calls the enterprise security industry "intensely competitive" and names four categories of rival — platform incumbents (Cisco, Microsoft, Alphabet), independent security vendors (Check Point, Fortinet, CrowdStrike, Zscaler, Wiz), point-product startups, and the public cloud vendors — while conceding that "some of our competitors may have substantially greater financial, technical, and other resources, greater name recognition, larger sales and marketing budgets, broader distribution, more diversified product lines, and larger and more mature intellectual property portfolios." That record supports a defensible position, not an unassailable one: narrow, not wide. | 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. |
| Moat type | network effects Network effects, with a caveat. The 10-K states the loop: as more advertisers use the solutions 'we gain access to more data regarding users and user engagement,' 'further strengthening our scaled distribution,' and 'As our distribution grows, we gain better insights for Axon AI.' The mechanism is two-sided matching of advertiser demand to publisher supply, though much of the force comes from data-and-learning scale. It is not switching costs, since contracts are 'cancelable at any time,' nor intangibles or IP, since 'there can be no assurance that we will adequately protect our intellectual property or that it will provide any competitive advantage.' | switching costs The 10-K describes an installed estate standardised on one operating system — "All of our hardware and software firewalls incorporate the PAN-OS operating system and include the same rich set of features, ensuring consistent operation across our entire product line" — across hardware, containerised CN-Series and virtual VM-Series form factors, centrally administered through Panorama and Strata Cloud Manager. That estate is monetised as recurring contract: subscription and support was 80.5% of total revenue in fiscal 2025 (80.0% in fiscal 2024, 77.1% in fiscal 2023), on terms "typically one to five years." The company's own risk factors describe the friction from the other side — customers "may face real or perceived switching costs when switching to our solutions from legacy security vendors" and "have often invested substantial personnel and financial resources to design and operate their networks... [and] may prefer to purchase from their existing suppliers rather than add or switch to a new supplier." As the incumbent in most of those estates, that friction now runs in Palo Alto's favour. | 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. |
| Leadership | at parity The filing discloses no share of any market, names 'Meta, Google, Amazon, and Unity Software' as competitors, and concedes rivals 'may have greater resources' and 'better technological or data analytics capabilities, or stronger brands or competitive positions in certain product segments.' Its one positional statement is parity language: 'We believe we compete favorably with respect to these factors.' Two unquantified points cut upward: Meta and Google are also clients, and MAX is called 'the preferred in-app bidding solution for many publishers worldwide.' | co leader The 10-K claims parity-plus, not primacy: "We believe we generally compete favorably with our competitors on the basis of these factors as a result of the features and performance of our portfolio, the ease of integration of our security solutions with technological infrastructures, and the relatively low total cost of ownership of our products," and reports that its "products and services have been recognized as leading in 25 categories by third-party industry analysts firms." It qualifies that immediately by conceding that some competitors carry greater resources, name recognition and distribution. Independent analyst placements match a co-leader read rather than a sole-leader one — a Leader in the inaugural 2025 Gartner Magic Quadrant for Hybrid Mesh Firewalls, a Leader for the third consecutive time in the 2025 Magic Quadrant for SASE Platforms, and a Leader in the 2026 Magic Quadrant for Endpoint Protection Platforms for the fourth consecutive year — in categories that name other Leaders too. | 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). |
| Pricing power | strong Strong, with the mechanism shown. The 10-K states that 'Advertisers are charged dynamically based on their campaign goals , rather than a simple fixed price per impression or per action.' Growth composition is the evidence: FY2025 revenue +70% with 'the volume of installations increased 3% and net revenue per installation increased 72%'; H1 2026 +56% with per-installation revenue +75% against 'a decrease in the volume of installations of 10%.' Adjusted EBITDA margin was 82.3% in FY2025 and 84.2% in H1 2026, though payment is performance-contingent and contracts cancel at will. | moderate Moderate, with the evidence pointing both ways in the same filing. Gross margin computed from the three years of income statements inside this FY2025 10-K runs 72.3% (fiscal 2023), 74.3% (fiscal 2024) and 73.4% in fiscal 2025 on revenue of $9.22 billion — against 68.8% in fiscal 2022 as reported in the prior-year 10-K (accession 0001327567-24-000029, filed September 6, 2024). Over the same span subscription and support rose from 77.1% to 80.5% of revenue: a mix shift toward software that has been margin-accretive, not margin-destructive, which is the direct answer to whether platformisation is simply discounting. Against that, the 10-K's risk factors state plainly that sales prices "may decline for a variety of reasons, including competitive pricing pressures, discounts, a change in our mix... or promotional programs," that the company "anticipate[s] that the sales prices and gross profits for our products could decrease over product life cycles," and that it "has also experienced demands for customer financing and deferred payments." Pricing is defended by bundle economics rather than commanded outright. | 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. |
| Summary | One reportable segment: an AI-priced auction matching advertiser demand to publisher supply, where 'Revenue from Axon Ads Manager comprises substantially all of our revenue.' The filed flywheel is real - more advertiser spend yields more user-engagement data, 'further strengthening our scaled distribution,' which feeds Axon AI - and it converts: FY2025 revenue $5.48B, up 70%, at an 82.3% adjusted EBITDA margin, carried by price (net revenue per installation +72%) not volume (installations +3%). What the filing does not evidence is a lock. Contracts are cancelable at any time, revenue concentrates in mobile gaming, and the distribution and identifier layers belong to Apple, Google and Meta - two of whom are simultaneously named competitors and disclosed clients. Wide margins with no disclosed structural lock is narrow. | A deployed firewall estate is the anchor. Every Palo Alto firewall — appliance, VM-Series, CN-Series, Cloud NGFW — runs the same PAN-OS with the same feature set and is managed from one console, so the security policy, the operator skills and the integration work are all specific to the vendor, and 80.5% of fiscal 2025 revenue is the recurring subscription and support contract sitting on top of it (10-K, Business and Risk Factors). Platformisation is the attempt to convert that anchor into wallet share: the 10-K states the strategy as helping customers "simplify their security architectures through consolidating disparate point products" by packaging offerings "into a tightly integrated architecture," and the acquisitions are consistent with it — IBM's QRadar assets in August 2024 "to help accelerate the growth of our Cortex business," Protect AI in July 2025, and the CyberArk agreement signed in July 2025. The evidence that consolidation is real rather than a discount: remaining performance obligation grew 36% year over year to $18.4 billion against 31% revenue growth in the quarter ended April 30, 2026 (Palo Alto Networks FQ3 2026 results release, June 2, 2026) — contracted future obligation compounding faster than recognised revenue, which is the opposite of what buying revenue with price would produce. The counterweight is disclosed in the same filings: the 10-K warns sales prices "may decline for a variety of reasons, including competitive pricing pressures, discounts," anticipates that "sales prices and gross profits for our products could decrease over product life cycles," and reports "demands for customer financing and deferred payments." Against CrowdStrike in security operations and Zscaler in SASE, Palo Alto is competing across the whole surface rather than defending a monopoly on any one of them — hence a narrow moat, not a wide one. | 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. |
| Chain position | Demand-side AI ad platform: it monetizes third-party mobile-game publishers' inventory and sells outcomes to advertisers, so it sits downstream of Apple/Google app distribution and Apple's IDFA identifier layer and upstream of publisher monetization. Meta and Google are simultaneously named competitors and disclosed clients. Single reportable segment after the June 2025 Apps divestiture. | A security-software consumer of the AI stack rather than a supplier to it — it buys compute to run Precision AI and now sells protection for the stack itself through Prisma AIRS (AI model scanning, posture management, red teaming, runtime and AI-agent security). Distribution is two-tier and concentrated: 44.2% of fiscal 2025 revenue came through three distributors and more than 8,500 channel partners, while no single end-customer exceeded 10% of revenue in fiscal 2025, 2024 or 2023. | Developer and landlord of power-advantaged, liquid-cooled AI data-center capacity, leased long-term to CoreWeave and investment-grade hyperscalers. |
| Products (share / barrier) |
|
|
|
| Long-horizon vote | +0.11 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | -0.20 at weight 0.20 · swarm neutral Editorial prior, not backtested. |