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 | Semtech | Quanta Computer | |
|---|---|---|---|
| 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. | narrow Semtech’s FY2026 10-K (fiscal year ended January 25, 2026) supports a narrow moat and no more. On the durable side, it owns the LoRa® radio franchise - “our LoRa® devices and wireless radio frequency technology” - which IoT Analytics’ LPWAN Market 2024 release (https://iot-analytics.com/wp-content/uploads/2024/03/INSIGHTS-RELEASE-LPWAN-Market-2024.pdf) ranks first outside China at 41% of LPWAN connections, and it argues that scarce analog talent “has historically made it more difficult for new suppliers in the analog market to quickly develop products and gain significant market share.” On the limiting side, the same filing says its patents do not “create definitive competitive barriers to entry”, that average selling prices “have historically decreased rapidly”, that some customers “can stop incorporating our products into their own products with limited notice to us and suffer little or no penalty”, and that customers in China (including Hong Kong) were 47% of fiscal 2026 net sales. The record is uneven: its income statement shows gross profit of $296,250 thousand on net sales of $868,758 thousand in fiscal 2024, $456,528 thousand on $909,287 thousand in fiscal 2025 and $542,144 thousand on $1,049,975 thousand in fiscal 2026, and the 10-K says difficulties “have adversely impacted” its ability to realise the benefits of the Sierra Wireless acquisition. | narrow The 2025 annual report (English version filed with TWSE on 2026-05-08) shows a seat in a concentrated supply chain but no protected margin. Citing Omdia, it says Taiwanese manufacturers as a group, not Quanta alone, "command over 80% of market share in global server shipment, and a dominant 90% share of the AI server market", which it reads as "high entry barriers and extreme supply chain concentration", and revenue from AI servers doubled to lift consolidated revenue to NT$2.12 trillion, up 50.5%. Against that, gross profit rose 33.92% while net sales rose 50.54%, the FY2025 gross profit margin was 6.98%, three coded customers took 29.40%, 20.41% and 14.86% of FY2025 sales, and the report lists "Intense Market Competition" among its unfavorable factors. The Taipei Times (2026-05-15) reports 1Q26 gross margin fell to 4.78% from 7.92% a year earlier. An entrenched incumbent position, not one that commands price. |
| 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. | intangibles ip The defensible assets the 10-K describes are intellectual: the LoRa® radio technology, analog and mixed-signal design expertise - “The development of IP and the resulting proprietary products is a critical success factor for us” - and 303 U.S. and 541 foreign patents. The filing itself discounts the patent part (“we do not believe they create definitive competitive barriers to entry”), which leaves the moat in proprietary technology and scarce design know-how rather than in scale or lock-in: Semtech outsources most manufacturing, sold 74% of fiscal 2026 net sales through independent distributors, and its customer agreements “do not require them to purchase a minimum quantity of our products”. | switching costs The report's evidence points to the customer program more than to IP, though it also cites scale. It credits "long-term partnerships with major CSPs and international brand customers" for "a pivotal position in the AI infrastructure supply chain", states there is "no major change in the Company's major customers over the last two years" (the same three coded customers exceeded 10% of sales in FY2024 and FY2025), and describes "pre-validated rack level solutions" and liquid-cooling development; for notebooks it cites "advantages in scale manufacturing and supply chain management". A US brokerage channel check reported by TechNews on 2026-05-12 independently says Quanta has long cultivated the four big North American cloud service providers and is favoured by them for the high stability of its liquid-cooling and system-integration work. The same report describes order allocation across three assemblers, with Foxconn's vertical integration winning it the lead, so the seat is shared, not exclusive. The IP route is thin by comparison: R&D was 1.75% of FY2025 revenue. |
| 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. | fast follower LoRa, the technology Semtech owns, leads outside China; elsewhere Semtech is contesting the front rank. IoT Analytics’ March 21, 2024 release states “When excluding all LPWAN data from China, LoRa has the leading share of global LPWAN connections at 41%—more than double NB-IoT’s share”, though “Globally, NB-IoT has the largest share of LPWAN connections at approximately 54%” and “LoRa’s share of LPWAN connections is decreasing”. In data-center optics, management said on the fiscal Q2 2027 call (TradingKey machine transcript, https://www.tradingkey.com/news/transcripts/262131465-tradingkey) that at “800 gig, we had the market share about 18%. So over the 2 years, we have grown the market share well over 50% for 800 gig”, a company figure; an independent September 2024 newsletter (Deep Fundamental) had instead named Marvell and MACOM “the dominant players” in drivers and TIAs and said Semtech “has struggled to keep pace since the transition to 200G”. A third-party lead measured at the technology level rather than as Semtech’s own share, a company-reported share that the only independent view contradicts, and no ranking for its other lines do not evidence co-leadership, so the band is fast follower. | co leader Independent sources place Quanta behind Hon Hai/Foxconn in the business that now drives it. A US brokerage channel check reported by TechNews (2026-05-12) counts about 2,100 of roughly 8,300 GB200/GB300 AI racks produced worldwide in April 2026 as Quanta's, second to Foxconn's about 3,700 (over 44% share) and ahead of Wistron's 1,300-1,400, and calls the field "one strong, two leading". DigiTimes' 2025 full-year ranking of the top 20 EMS/ODM vendors by revenue (published 2026-02-02, as reported by cnyes) puts Quanta third at US$68.2 billion, behind Foxconn at US$261 billion and Wistron at US$70.6 billion; DigiTimes' 1H25 ranking had it second, the spot it took from Pegatron in 1H24. A leading co-supplier, not the 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. | moderate The 10-K describes a market where prices fall: “In the past, we have reduced the average selling prices of our products in anticipation of future competitive pricing pressures”, and Semtech’s products “are typically differentiated in performance but are priced competitively”. Margins have nonetheless climbed with the data-center mix: the fiscal Q2 2027 release (https://www.sec.gov/Archives/edgar/data/0000088941/000008894126000028/smtc-07262026x8k991.htm) reports GAAP gross margin of 53.8% against 52.1% a year earlier and guides fiscal Q3 adjusted gross margin to 58.3% +/- 100 bps, or 63.9% excluding the business held for sale. The release does not separate price from mix. | weak The annual report gives FY2025 gross, operating and net profit margins of 6.98%, 4.12% and 3.53%, with gross profit up 33.92% on net sales up 50.54%. The Taipei Times (2026-05-15) reports 1Q26 gross margin fell to 4.78% from 7.92% a year earlier and 6.33% in the prior quarter; the CFO said high-priced AI server racks "weigh on margins under the buy-and-sell transactions" and that Quanta "has negotiated with customers to shift toward consignment deals to lift margins". |
| 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. | Semtech is an analog and mixed-signal chipmaker being reshaped around two franchises. The first is AI data-center connectivity in its Signal Integrity segment - FiberEdge TIAs and drivers for optical transceivers and CopperEdge redrivers for active copper cables - whose net sales the FY2026 10-K reports at $322,608 thousand in fiscal 2026 against $177,033 thousand in fiscal 2024; the March 2026 HieFo acquisition added foundries that make devices for data-center interconnects. The second is LoRa, the long-range, low-power radio that IoT Analytics ranks as the leading LPWAN technology outside China. Around them sit protection devices, sensing and power products, and the IoT Systems business inherited from Sierra Wireless, whose cellular-module unit Semtech has agreed to sell to Compal Electronics for US$62 million (ABI Research, September 9, 2026, https://www.abiresearch.com/market-research/insight/7788486-compal-electronics-takes-semtechs-mantle-t). Momentum is strong: the fiscal Q2 2027 release reports record net sales of $341.9 million, up 33% year over year, and management said data-center revenue hit a record $100 million in the quarter. But the 10-K is frank about limits - rapid ASP erosion, customers that can drop its parts with little notice, 47% of sales to China, competitors that are “much larger and better resourced than we are”, and patents that do not bar entry. Proprietary technology in two growing niches, rather than a locked-in customer base, makes the moat narrow. | Quanta Computer is a Taiwanese ODM whose 2025 annual report describes it as one of the world's leading manufacturers of notebooks, AI servers and cloud infrastructure products. AI server revenue doubled in FY2025, taking consolidated revenue to NT$2.12 trillion, while notebook shipments rose 1.3% to 46.5 million units; by 1Q26 servers were 80% of revenue and notebooks less than 15% (Taipei Times, 2026-05-15). Independent data put it second to Foxconn in NVIDIA GB200/GB300 rack output in April 2026 and third, behind Foxconn and Wistron, in DigiTimes' 2025 full-year EMS/ODM revenue ranking. The durable element is the qualified seat: long-standing programs with the large North American cloud providers, whose orders the CFO says now have clear visibility through 2028. What it lacks is pricing power. The FY2025 gross margin was 6.98% and 1Q26's 4.78%, three coded customers took 29.40%, 20.41% and 14.86% of FY2025 sales, and margin relief comes from negotiating consignment terms with customers, not from raising prices. |
| Chain position | A hybrid-cloud platform, enterprise-AI (watsonx), and consulting provider to large enterprises — a software/cloud layer of the AI stack. | Semtech sells mostly through independent distributors (74% of fiscal 2026 net sales) to OEMs. In AI data centers its FiberEdge and CopperEdge parts go into the optical transceivers and active copper cables that module and cable makers build, and the 10-K says hyperscale cloud providers “are generally our indirect customers”. Two customers took 14% and 11% of fiscal 2026 net sales, and customers in China (including Hong Kong) 47%. | Contract designer-manufacturer: builds notebooks for international brands and servers and AI racks for cloud service providers. The U.S. took 72.68% of FY2025 sales, and the report lists NVIDIA, Intel, AMD, Qualcomm and MediaTek as its CPU/GPU suppliers. |
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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 neutral Editorial prior, not backtested. | +0.05 at weight 0.20 · swarm neutral Editorial prior, not backtested. |