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.
| IBM | Powell Industries, Inc. | Lam Research | |
|---|---|---|---|
| Moat rating | narrow IBM's FY2025 10-K describes "a highly competitive environment" with "hundreds of competitors" and says IBM is "regularly exposed to new competitors" as it executes its hybrid-cloud/AI strategy, while differentiating through "incumbency with enterprises" and "client relationships and trust" — a real but narrow moat, not a wide one. | none The FY2025 10-K (filed 2025-11-19) says the company believes its integration capabilities, technical and project management acumen, application engineering expertise and specialty contracting experience 'give us a sustainable competitive advantage in our markets', and that 'a significant portion of our business is from repeat customers', many times involving EPC firms 'with whom we often have long, established relationships'. Neither the filing nor Powell's record shows that edge protecting returns. Item 1A warns 'Our industry is highly competitive' and says certain competitors 'may have lower cost structures' and 'may, therefore, be able to provide their products or services at lower prices'. Item 1 says products are 'typically awarded in competitive bid situations' and that projects 'are typically non-recurring.' Stored fundamentals from Powell's filings show operating margin between -4.9% and 7.1% in every fiscal year from FY2011 to FY2022, with operating losses in FY2017 (-$19.3M on $395.9M of revenue) and FY2018 (-$9.1M on $448.7M). Operating margin has since risen to 19.7% in FY2025 ($217.9M on $1,104.3M), but the 10-K credits the gross-margin gain to 'favorable volume leverage and strong project execution in a stable pricing environment', not to a competitive edge. A self-described advantage that left operating margin no higher than 7.1% in any year from FY2011 to FY2022 is not shown to be a moat, so the band is none. | wide The FY2026 10-K competition section describes tool-level qualification lock-in as the structural fact of the industry: 'semiconductor manufacturers must make a substantial investment to qualify and integrate new capital equipment into semiconductor production lines. As a result, once a semiconductor manufacturer has selected a particular supplier's equipment and qualified it for production, the manufacturer generally maintains that selection for that specific production application and technology node as long as the supplier's products demonstrate performance to specification in the installed base.' The filing then sizes what that incumbency is worth: of 23,232,690 thousand dollars of FY2026 revenue, 8,347,202 thousand - about 36% - was customer-support-related revenue and other, which the same document defines as 'sales of customer services, spares, upgrades, and non-leading-edge equipment' sold back into the installed base. A qualified position plus a third of revenue annuitised against it is a durable barrier rather than a cyclical one. |
| Moat type | switching costs The 10-K roots IBM's differentiation in "incumbency with enterprises" and "client relationships and trust" — installed-base lock-in across its hybrid-cloud platform (Red Hat) and enterprise software and infrastructure raises switching costs. | none The 10-K describes engineering know-how, not protected technology or lock-in. It says 'We consider our engineering, project management, systems integration and technical support capabilities vital to the success of our business', that 'Powell's expertise in vacuum circuit breaker engineering is internationally recognized', and that unpatented technology, including engineering technical skills and know-how, 'is important to our overall business'. It also says 'we believe that the growth of our business will depend primarily upon the quality of our products and our relationships with our customers, rather than the extent of our patent protection', so patents are not the source. Switching costs are not shown: projects are 'typically awarded in competitive bid situations' and 'typically non-recurring', even though 'a significant portion of our business is from repeat customers'. The same filing says some competitors 'are significantly larger and have substantially greater global resources such as engineering, manufacturing and marketing', so the know-how is a capability rivals also bring to each bid, not a demonstrated moat source; the type is none. | switching costs The 10-K grounds the advantage in the cost of requalification, not in scale or patents: a customer that has qualified a competitor's tool is hard to win, and conversely Lam's own qualified positions persist for that application and node. The same section adds that the company must keep serving 'our installed base of customers through the delivery of high-quality and cost-efficient spare parts', naming the installed base as the asset being defended. |
| Leadership | fast follower An enterprise incumbent that differentiates via "incumbency with enterprises" but is "regularly exposed to new competitors" in its hybrid-cloud/AI push (FY2025 10-K) — a follower in the current AI cycle rather than its leader. | at parity The 10-K gives no share or rank. It says Powell competes 'with a small number of multinational competitors', naming ABB, Eaton, Schneider and Siemens Industries, and that some are 'significantly larger and have substantially greater global resources'. It adds that bid evaluation varies 'from project to project', covering technical support, engineering and manufacturing capability, equipment rating, delivered value, scheduling and price. Powell therefore competes bid by bid alongside those multinationals rather than leading the category. | co leader The 10-K claims position but not primacy: 'We believe we are in a strong position with our leadership and expertise in deposition, etch, and clean markets.' The same document names Applied Materials as primary competitor in deposition and Applied Materials, Hitachi and Tokyo Electron as primary competitors in etch, which is a shared-leadership structure rather than a clear single leader. |
| Pricing power | moderate Gross margin is high and rising (54.9% FY2021 to 58.2% FY2025) on a software-mix shift, but "price" is a principal method of competition per the 10-K and consulting/infrastructure remain price-competitive. | weak The 10-K says gross margin rose to 29% of revenue in FY2025 from 27% in FY2024, 'due to favorable volume leverage and strong project execution in a stable pricing environment'. The 10-Q for the quarter ended June 30, 2026 (https://www.sec.gov/Archives/edgar/data/80420/000008042026000107/powl-20260630.htm) gives the same reason for 30% in the first nine months of FY2026, so neither filing credits price. Before this upcycle, stored fundamentals from Powell's filings show gross margin between 12.8% and 21.6% in every fiscal year from FY2011 to FY2022 (FY2022: $85.0M of gross profit on $532.6M of revenue, about 16%), which fits cyclical volume leverage more than pricing power. The limits are explicit: the 10-K says 'Fixed-price contracts can limit our ability to pass these increases to our customers', and Item 1A says certain competitors 'may, therefore, be able to provide their products or services at lower prices'. The one offset is cost pass-through, not price-setting: the 10-K says 'we believe we can manage this volatility through contract pricing adjustments'. Pricing power is rated weak. | moderate Real but bounded, and the filing is explicit that the recent gain was mix rather than price. Gross margin as a percent of total revenue rose 180 basis points to 50.5% in fiscal 2026 from 48.7% in fiscal 2025 (gross margin of 11,725,308 thousand dollars on revenue of 23,232,690 thousand, against 8,979,059 on 18,435,591; 7,052,791 on 14,905,386 in fiscal 2024), and the MD&A attributes that: 'Gross margin as a percentage of revenue increased in fiscal year 2026 compared to fiscal year 2025 largely due to favorable customer mix, partially offset by aluminum and steel tariff-related spend.' Against it, the same filing says manufacturers evaluate suppliers on 'overall cost of ownership', that the spares business competes with third-party spare parts providers, and that the customer list is a handful of very large buyers (Micron, Samsung, SK hynix and TSMC named as the most significant customers). |
| Summary | IBM's moat rests on deep enterprise incumbency — sticky installed-base relationships across hybrid cloud (Red Hat), enterprise software, and mission-critical infrastructure, plus brand and a large patent base. But its own FY2025 10-K frames "a highly competitive environment" with "hundreds of competitors" and says IBM is "regularly exposed to new competitors" as it pursues hybrid cloud and AI, so the moat is durable but narrow and contested in the AI/cloud growth arena. | Powell designs, builds and services custom-engineered power-distribution packages: power control rooms, E-Houses, switchgear and medium-voltage breakers. Its FY2025 10-K says the company believes its integration, project-management and application-engineering capabilities 'give us a sustainable competitive advantage in our markets', and that a significant portion of its business comes from repeat customers, often through EPC firms with which it has long relationships. The record does not show that edge protecting returns. Work is typically won in competitive bids, projects are typically non-recurring, and the 10-K names ABB, Eaton, Schneider and Siemens Industries as principal competitors, some of which it calls significantly larger. The company says it believes growth depends on product quality and customer relationships rather than patents. Stored fundamentals from Powell's filings show operating margin between -4.9% and 7.1% in every fiscal year from FY2011 to FY2022, with operating losses in FY2017 and FY2018. In the current cycle, gross margin reached 29% in FY2025 (10-K) and 30% in the first nine months of FY2026 (10-Q, quarter ended June 30, 2026, https://www.sec.gov/Archives/edgar/data/80420/000008042026000107/powl-20260630.htm). Both filings attribute that to favorable volume leverage and strong project execution 'in a stable pricing environment', not to price increases. The same 10-Q reports backlog of $2.4 billion and says diversification into electric utility and data centers 'has reduced the cyclicality of our business.' It also cautions that as data center projects become a larger component of backlog and revenues, the product mix may shift, 'as such projects will likely require less custom engineered-to-order equipment and systems than other end markets', which is the custom-engineering skill the claimed edge rests on. | Lam sells etch, deposition and clean tools into a per-node, per-application qualification process that its own 10-K says customers generally do not revisit once a supplier is qualified. The result is two linked economics, and the FY2026 filing splits them: systems revenue of 14,885,488 thousand dollars and customer-support-related revenue and other of 8,347,202 thousand, on total revenue of 23,232,690 thousand. The second line is the installed-base annuity - services, spares, upgrades and refurbished Reliant tools sold wherever Lam already holds the process step. The 10-K names Applied Materials as the primary competitor in dielectric and metals deposition, ASM International and Wonik IPS in ALD/PECVD, and Applied Materials, Hitachi and Tokyo Electron in etch, so this is shared rather than sole leadership. The live erosion risk is policy, not a rival product: China was 34% of revenue in both fiscal 2026 and fiscal 2025 (7,859,811 thousand dollars in FY2026, the largest single region), and the filing states that U.S. export controls on sales to customers in China, including entity listings of multiple customers, restrict sales of equipment and spare parts by U.S. suppliers and thereby 'provides an advantage to our international competitors that are not subject to these restrictions'. |
| Chain position | A hybrid-cloud platform, enterprise-AI (watsonx), and consulting provider to large enterprises — a software/cloud layer of the AI stack. | Supplies custom-engineered switchgear and power control rooms to oil and gas, utility and commercial/industrial projects. Its Q3 FY2026 bookings included 'a data center project valued at over $400 million' (10-Q, quarter ended June 30, 2026, https://www.sec.gov/Archives/edgar/data/80420/000008042026000107/powl-20260630.htm). | Upstream wafer-fabrication-equipment supplier; the 10-K names Micron, Samsung, SK hynix and TSMC as its most significant customers across FY2024-FY2026, so Lam sits one step above the memory and foundry capacity that AI compute depends on. |
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| Long-horizon vote | +0.06 at weight 0.20 · swarm bearish Editorial prior, not backtested. | -0.06 at weight 0.20 · swarm bearish Editorial prior, not backtested. | +0.30 at weight 0.20 · swarm neutral Editorial prior, not backtested. |