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.
| Cloudflare | IREN | Applied Materials | |
|---|---|---|---|
| Moat rating | wide The band is earned by a measured share gap on a hard-to-rebuild asset, not asserted. W3Techs' 17 September 2026 survey (w3techs.com/technologies/overview/proxy) puts Cloudflare in front of 25.8% of all websites, an 85.0% share of the reverse-proxy market, against Amazon CloudFront at 5.5%, Fastly at 3.0% and Akamai at 2.1% - roughly fifteen times the nearest rival. The FY2025 10-K filed 2026-02-26 describes what a challenger would have to reproduce to contest that: a network that 'spans more than 330 cities in over 125 countries worldwide and interconnects with over 13,000 networks globally', architected to 'run every service on every server in every city' - capacity and peering accumulated city by city over a decade, not bought in a quarter. The position has been monetised without margin decay: SEC XBRL fundamentals on this site show GAAP gross margin inside a 74.5-78.7% band in every fiscal year from FY2017 to FY2025 while revenue grew from $134.9M to $2,167.9M, and Cloudflare's Q4/FY2025 results release of 2026-02-10 (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) reports remaining performance obligations up 48% and new annual contract value up nearly 50% year over year. What stops this being a certainty rather than a judgement: the dominant share sits in application services, while SASE and developer compute are contested by vendors the 10-K itself concedes hold 'substantially greater financial, technical, and other resources.' | none The FY2026 10-K (filed 2026-08-27) shows IREN holds an input the industry competes on: it names 'access to secured and energized power' first among what it believes are the principal competitive factors in its industry, and reports 'executed grid connection agreements, letters of agreement or equivalents representing approximately 5GW of total power capacity' in the United States, Canada, Spain and Australia as of June 30, 2026. It does not claim an advantage over rivals in that input. It says 'Certain competitors may have access to more competitively priced power, a greater access to power and a better capacity to timely secure grid connections,' and 'Many of our competitors have greater financial, technical or commercial resources, longer cloud operating histories or larger customer bases, compared to us.' Operating AI Cloud Services capacity was approximately 40MW at June 30, 2026, and the stored XBRL fundamentals from this 10-K show an FY2026 operating loss of about $1,046.7M on revenue of about $707.0M, so no durable advantage is yet demonstrated. | 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 | cost scale The FY2025 10-K states the mechanism outright, and it is a unit-cost curve rather than a user-to-user network: 'We have chosen to utilize this idle capacity to create a free tier of service which has generated substantial global scale for us. In turn, this scale makes us attractive partners for Internet Service Providers (ISPs) globally, which reduces our co-location and bandwidth costs. As our network grows, these dynamics become even more powerful.' The same section explains why the curve applies to every line rather than one: the architecture lets Cloudflare 'deploy standard, commodity hardware' and run 'every service on every server in every city', so a new product reaches 330+ cities at near-zero incremental capital. That is what lets the filing claim Workers is offered 'at prices that are highly competitive with public cloud vendors' while FY2025 GAAP gross margin still printed 74.5%. Switching costs (traffic routed through Cloudflare, DNS delegated to it) and threat-intelligence feedback from aggregate traffic sit on top, but the filing-stated primary source is cost falling as the network grows. | none The FY2026 10-K's asserted advantage is control from owning its data centers, 'including the associated land, grid connections and substations', which it believes allows it 'to benefit from more sustainable cash flows and operational flexibility relative to operators that rely upon third-party colocation services or short-term land leases'. Its only scale language is a belief that its 'procurement scale, deployment experience and direct control over the data center layer' lets it bring new compute into service 'rapidly and at scale', a deployment-speed claim, and it 'generally target[s]' regions with 'low-cost and attractive renewable energy sources', a siting target rather than a demonstrated cost position. It does not claim a cost or scale lead: it says 'Many of our competitors are larger, have longer operating histories and significantly greater resources than we do' and that certain competitors 'may have access to more competitively priced power, a greater access to power and a better capacity to timely secure grid connections.' There is no network effect or lock-in either, since existing contracts have 'terms ranging from month to month up to five years'. No enumerated moat source is grounded. | 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 Leadership is measured, not inferred. W3Techs on 2026-09-17 records an 85.0% reverse-proxy market share against 5.5% for Amazon CloudFront and 2.1% for Akamai, and makes Cloudflare the largest authoritative-DNS provider at 18.5% of all websites versus 9.9% for the next-placed GoDaddy Group. The FY2025 10-K reports the enterprise side moving the same way - 4,298 large customers at 2025 year-end against 3,497 a year earlier and 2,756 in 2023 - and the Q4/FY2025 results release (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) cites the largest annual contract value deal in company history at about $42.5M per year. The band is for the application-services core the share data covers; in SASE and in serverless compute Cloudflare is a challenger to larger incumbents, and no independent placement naming Cloudflare in those markets was obtained for this profile. | behind The 10-K lists IREN's competitors as hyperscalers (Amazon Web Services, Google Cloud, Microsoft Azure, Oracle Cloud) and specialized AI Cloud Services providers (CoreWeave, Nebius, Crusoe, Lambda, Nscale, SpaceX and others). It says IREN began providing AI Cloud Services in 2024 and cites its 'shorter operating history in AI Cloud Services relative to some competitors', and states 'Some of our competitors have longer operating histories, larger customer bases, more comprehensive IP portfolios and patent protections, more design wins, and greater financial, sales, marketing and distribution resources than we do.' Operating AI Cloud Services capacity was approximately 40MW at June 30, 2026. The filing describes a smaller, later entrant that trails some competitors on operating history, customer base and resources, with its progress so far resting on two anchor contracts (a ~$9.7B five-year Microsoft agreement and a ~$3.4B five-year NVIDIA contract) rather than any claimed category position. | 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 | moderate Evidence cuts both ways, which is why this is not the top band. For it: GAAP gross margin has never left a 74.5-78.7% band across FY2017-FY2025 (SEC XBRL fundamentals on this site) even as revenue compounded 16x, and the Q4/FY2025 results release (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) shows customers committing more rather than less - RPO +48% year over year and new ACV up nearly 50%. Against it: FY2025's 74.5% is the lowest reading in that nine-year series, a large permanent free tier anchors the entry price, the 10-K positions Workers 'at prices that are highly competitive with public cloud vendors', and the competition risk factor warns that larger rivals can 'sell products and services with which we compete at zero or negative margins, offer fee waivers and reductions or other economic and non-economic concessions', with competitive pressure that 'may result in price reductions, fewer subscriptions, reduced revenue and gross margin'. | weak The 10-K's risk factors state 'Our competitors' products, services and technologies may be cheaper or provide better functionality or features than ours, which has resulted and may in the future result in lower-than-expected selling prices or demand for our products.' They also say long-term contract pricing 'is generally fixed or agreed at the time of contracting', so if market pricing for comparable capacity rises during a contract's term 'we will not benefit from those increases with respect to capacity already committed under our existing long-term contracts', and that if customers suffer a downturn or discontinue its services it 'may be compelled to offer more flexible terms, lower our prices or risk losing a significant customer.' The stored XBRL fundamentals from this 10-K show FY2026 revenue of about $707.0M against an operating loss of about $1,046.7M, so there is no margin record yet that evidences pricing power. | 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 | Cloudflare sells security, performance and connectivity as services delivered from one global anycast network rather than from boxes at a customer's edge. The FY2025 10-K frames the market as a consolidation away from enterprises that 'string together a diverse set of on-premises hardware boxes from different vendors' and away from 'stringing together multiple point-cloud solutions that only address specific network needs', toward one integrated provider it calls the Connectivity Cloud, and places Cloudflare as 'a leader in this Connectivity Cloud category'. The economics are unusual: idle capacity funds a free tier, the free tier buys global traffic scale, that scale makes Cloudflare a peering partner ISPs want, and peering cuts colocation and bandwidth cost - a loop the filing says 'become[s] even more powerful' as the network grows. Independent measurement confirms where that loop has already settled the market: W3Techs on 2026-09-17 shows an 85.0% reverse-proxy share and the largest authoritative-DNS footprint at 18.5% of all websites. Commercially the company ended 2025 with roughly 332,000 paying customers in more than 190 countries and 4,298 large customers, up from 2,756 two years earlier, with no customer above 10% of revenue. The contested half of the story is the growth half: the SASE platform competes with established cloud-security, email-security and SD-WAN vendors, and the developer platform competes for storage and compute against hyperscalers, markets where the 10-K's own risk factors concede rivals have greater name recognition, larger customer bases and 'more mature products and services developed for large customers'. The core is defended; the adjacencies are being fought for, and FY2025 gross margin at a nine-year low of 74.5% is the first visible cost of building GPU capacity for that fight. | Per its FY2026 10-K, IREN is a vertically integrated AI Cloud Services platform that owns the data center, compute and software layers, underpinned by executed grid connection agreements, letters of agreement or equivalents representing ~5GW and a further multi-GW development pipeline. Its commercial record is concentrated: a five-year Microsoft agreement (~$9.7B total contract value, Horizon 1 delivered and accepted in August 2026, Horizons 2-4 targeted for delivery in phases in calendar Q4 2026) and a five-year ~$3.4B NVIDIA cloud contract together make up a substantial majority of contracted revenue. It holds NVIDIA Preferred Partner and Exemplar Cloud status (HGX B300 and GB300 NVL72) and a strategic partnership intended to support the deployment over time of up to 5GW of NVIDIA DSX-aligned infrastructure, which the filing cites among arrangements that are non-binding or subject to conditions, with no assurance as to the extent of deployments. Against that, the filing names hyperscaler and specialized competitors (AWS, Google Cloud, Azure, Oracle, CoreWeave, Nebius, Crusoe, Lambda, Nscale, SpaceX), many of which it says have greater resources, customers that can use or develop their own solutions, and possible delays to Texas energization from changes to ERCOT's Batch Zero procedures, so the power position is not a demonstrated advantage over rivals and its value depends on execution. | 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 | Cloudflare sits between end users and whatever hosts the application - origin data centre, public cloud or SaaS - so it is a control layer in front of infrastructure rather than infrastructure a workload runs on, which the 10-K argues is the point: customers 'concerned about being locked in to any one public cloud provider' want policy enforced by 'an independent and integrated services provider'. Two AI-era roles follow from that position. As a supplier, the filing describes 'ongoing deployment of graphics processing units (GPUs) across our global network of servers' behind Workers AI, Vectorize and AI Gateway, putting inference next to the user instead of in a region. As a gatekeeper, the application-services suite now exists in part to 'easily identify, block and control access from AI crawlers and AI agents and operators' and underpins announced efforts to let content creators monetise how those crawlers reach their work - which makes Cloudflare a toll point between AI model builders and the open web. | Downstream AI-cloud operator: owns grid-connected data centers and deploys NVIDIA/AMD GPU systems it rents to hyperscalers, frontier labs, AI developers and enterprises (anchor customers Microsoft and NVIDIA). | 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 | +0.38 at weight 0.20 · swarm neutral Editorial prior, not backtested. | -0.20 at weight 0.20 · swarm bearish Editorial prior, not backtested. | +0.42 at weight 0.20 · swarm bullish Editorial prior, not backtested. |