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.
| Intel | Fabrinet | Apple | |
|---|---|---|---|
| Moat rating | eroding The FY2025 10-K (filed 2026-01-23) repeats the concession, now broadened: 'we have lost market share in recent years, including in both client and data center markets, in the market for x86-based semiconductor products, and more generally in the markets for semiconductor compute products, as competitors have introduced highly competitive data center and client platform products.' It adds that the data-center business 'has been further negatively impacted in the past few years by the significant shift of customer spend toward GPUs optimized for AI workloads' — a historically wide moat still actively eroding. | narrow The FY2026 10-K grounds a real but bounded defence. On the defence side: Item 1 states that in the manufacturing services market "there are significant barriers to entry in our existing and target markets, including lengthy sales cycles, the need to demonstrate complex precision optical and electro-mechanical engineering and manufacturing capabilities to a prospective customer and the ability to protect a customer's intellectual property," and that qualification of a program "may take three to six months or longer to complete." On the limiting side, the same filing shows the protection does not reach price: gross profit was 12.0% of revenues in FY2026 against 12.1% in FY2025 and 12.4% in FY2024 even as revenue rose 35.7% to $4.64 billion, four customers each exceeded 10% of revenue (Cisco 19.9%, NVIDIA 16.3%, Nokia 10.7%, Amazon 10.5%), and "reliance on a small number of customers gives those customers substantial purchasing power and leverage in negotiating contracts with us." Sales are made on "individual purchase orders that have short lead times and are subject to revision or cancellation," so the qualified program is sticky while the contract is not. | narrow Argued, not assumed. The FY2025 10-K does evidence a real moat in margin: total gross margin percentage rose 44.1% (2023) to 46.2% (2024) to 46.9% (2025) in markets the same filing describes as characterised by 'aggressive price competition, downward pressure on gross margins.' But the filing bounds the claim itself: it concedes 'a minority market share in the global smartphone, personal computer, tablet and wearables markets,' it discloses no retention, active-device or installed-base figure anywhere (its only 'large installed bases of active devices' reference describes competitors), and it discloses that both of the highest-margin layers are already being cut down by force -- Apple is 'currently subject to a court order preventing it from imposing any commission or fee on certain purchases' on the U.S. App Store storefront, has had to open 'alternative methods of distribution for iOS and iPadOS apps, alternative payment processing' in the EU, and warns that a reversal on appeal in the Google search case could impose remedies 'prohibiting Google from offering the Company commercial terms for search distribution.' A moat that earns 46.9% gross margin but whose most profitable layer is being narrowed by two courts and a regulator is narrow, not wide. |
| Moat type | intangibles ip The durable assets remain the x86 architecture and process-technology IP: the FY2025 10-K claims 'We are a global leader in the design and manufacturing of CPUs and other semiconductor products' and stakes the recovery on process IP — 'Intel 18A introduces two industry firsts in high-volume semiconductor manufacturing: gate-all-around transistors (RibbonFET) and backside power delivery (PowerVia).' | switching costs The 10-K locates the stickiness in qualification rather than in patents or scale. Customers "do not purchase our services until they qualify the services and satisfactorily complete factory audits and vendor evaluations"; qualification "may take three to six months or longer"; production is transferred "copy-exact: the setup of a production process identical to the one used by our customer"; and the filing's own experience of changing a component source is that it "resulted in our customers or their end customers requiring requalification and validation of components, a process that can often be lengthy and has negatively impacted the timing of our revenue" — the same friction a customer would face moving the program elsewhere. The filing rules out an IP-based moat itself: "Historically, patents have not played a significant role in the protection of our proprietary rights," and any process improvement developed for a customer's product is "immediately assigned to that customer." The Thailand cost base is a genuine advantage but the filing warns it is not durable on its own — "Wage increases may impact our ability to sustain our competitive advantage and may reduce our profit margin." | switching costs The 10-K locates the durable advantage in an integrated stack and its third-party ecosystem, not in patents: it names 'a strong third-party software and accessories ecosystem' among the principal competitive factors and states the Company 'designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services,' while explicitly disclaiming IP as the source -- 'No single intellectual property right is solely responsible for protecting the Company's products and services' and the Company 'relies primarily on the innovative skills, technical competence and marketing abilities of its personnel.' The remedies now in force confirm the diagnosis negatively: the same filing describes being required to permit alternative distribution and alternative payment processing in the EU and being barred from charging commission on certain linked-out purchases in the U.S. -- remedies aimed squarely at lowering the cost of leaving Apple's rails, which is what a switching-cost moat is. |
| Leadership | fast follower The FY2025 10-K still opens 'We are a global leader in the design and manufacturing of CPUs', yet concedes lost share 'in both client and data center markets' and a spend shift 'toward GPUs optimized for AI workloads' where Intel participates via 'Xeon, AI PCs, Arc GPUs and our open software stack' plus 'inference-optimized GPUs on a targeted annual cadence' — following the AI compute market rather than setting its pace. | co leader The leadership claim in the filing is the company's own qualitative assessment: "We believe we are a leader in manufacturing products for the optical communications market," and, on breadth of process technology, "Based on our experience with customers and our qualitative assessment of our capabilities, we believe we provide a broader array of process technologies to the optics industry than any other manufacturing services provider." The same Item 1 names a crowded field against it — "Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation, Venture Corporation Limited and Eoptolink Technology Inc., Ltd., as well as the internal manufacturing capabilities of our customers" — and no independent share ranking is given, so the record supports front-of-field standing but not sole primacy. | fast follower Apple leads on integration and margin rather than on units, and the filing says so: it 'has a minority market share in the global smartphone, personal computer, tablet and wearables markets,' while competitors have 'broad product lines, low-priced products, large installed bases of active devices, and large customer bases.' On the AI axis that defines this graph, Apple is following rather than leading -- it now licenses a rival's frontier models to power Siri (see the Apple Intelligence / Siri row and its citation) while pushing its own advantage down into silicon. |
| Pricing power | weak The FY2025 10-K states the mechanism itself: higher-priced products 'have lower margins as they are produced at external foundries rather than in our manufacturing facilities. To the extent demand shifts from our higher-margin to lower-margin products in any of our market segments, our gross margin percentage has decreased and may decrease again' — plus $878 million of 2025 inventory reserves on the early Intel 18A ramp. | weak Gross profit was 12.0% of revenues in FY2026, 12.1% in FY2025 and 12.4% in FY2024 — flat to down across three years in which revenue grew from $2.88 billion to $4.64 billion — and the FY2026 increase in gross profit is attributed to "sales volume and product mix," not price. Item 1 says so directly: "we expect the prices we charge for our manufactured products to decrease over time (partly as a result of competitive market forces)," with the offset coming from cycle-time, mix, yield and material-cost work rather than from rate. The risk factors add that customer consolidation gives buyers "increased leverage that may result in, among other things, decreases in our average selling prices," and that new competition "could result in price reductions for our services, reduced gross profit margins or loss of market share." | strong The 10-K's own gross-margin table: total gross margin percentage 44.1% (2023) to 46.2% (2024) to 46.9% (2025), with Services at 75.4% versus Products at 36.8%, and iPhone net sales rising 'due to higher net sales of Pro models' -- mix moving up, not down. Held against the filing's own hedge that 'gross margins will be subject to volatility and downward pressure,' the realised trend is the stronger evidence. |
| Summary | Still the incumbent x86 CPU designer-manufacturer — FY2025 revenue was $52.9 billion, roughly flat — but the filing concedes lost share in client and data center and an AI-driven customer shift toward GPUs; the counter-thesis is process IP, with Intel 18A shipping in Core Ultra Series 3 ('the first products to be manufactured using our new Intel 18A process technology') and Intel 14A 'designed from inception as an offering to external customers.' | Fabrinet is the neutral outsourced factory for complex photonics. The FY2026 10-K describes a business that wins on qualification and IP hygiene rather than on product ownership: a "factory-within-a-factory" that physically segregates each customer's engineers and floor space, copy-exact line transfers, Telcordia-grade environmental qualification, and a claim that "there is no other manufacturing services provider with a similar breadth and depth of optical and electro-mechanical engineering and process technology capabilities that does not directly compete with its customers in their end-markets." That neutrality is claimed as a belief, not demonstrated — the filing's own framing is "we believe" — and Item 1 names the field it is measured against without characterising any of them: "Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation, Venture Corporation Limited and Eoptolink Technology Inc., Ltd., as well as the internal manufacturing capabilities of our customers." Once a program is qualified it tends to stay, and "in many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them." What the moat does not buy is margin. Revenue grew 35.7% in FY2026 to $4.64 billion on the AI-datacenter build-out — data center products are now 47.9% of revenue — yet gross margin slipped to 12.0%, and Item 1 concedes the company expects "the prices we charge for our manufactured products to decrease over time." The two live erosion paths are named in the risk factors: customer consolidation that "may result in, among other things, decreases in our average selling prices," and customers who "acquired the capacity to manufacture products in-house." Concentration cuts both ways this year — FY2025 had two customers above 10% of revenue, FY2026 had four, so the book broadened even as its scale grew. | Apple's moat is usually asserted through the ecosystem; the FY2025 10-K neither quantifies nor claims retention, so the evidence has to be read elsewhere in the filing. Where it does show is mix and margin: Services reached $109.2B of $416.2B net sales (+14%) at a 75.4% gross margin against 36.8% on Products, so 26% of revenue delivered $82.3B of the $195.2B total gross margin, and iPhone grew 'due to higher net sales of Pro models.' That profit concentration is also the vulnerability the filing itself flags: Apple 'earns revenue from licensing arrangements with Google LLC and other companies to offer their search services on the Company's platforms,' arrangements 'currently subject to government investigations and legal proceedings' after Google was found to have violated U.S. antitrust laws on August 5, 2024 and the D.C. District Court ordered remedies on September 2, 2025 -- with the 10-K warning that a reversal on appeal could impose DOJ's proposed remedies 'prohibiting Google from offering the Company commercial terms for search distribution,' which 'could materially adversely affect the Company's ability to earn revenue from such licensing arrangements.' Apple never discloses the size of that payment in the filing -- the concentration is admitted but not measured. Alongside it, the App Store toll has already been reduced in both jurisdictions. What is not in dispute is the vertical integration: Apple designs the silicon and now the cellular modem, and uses 'custom components available from only one source.' Read together: a genuine, margin-visible switching-cost moat around an integrated stack, with its two most profitable layers under active legal reduction. |
| Chain position | x86 compute incumbent and would-be US leading-edge foundry; its 18A/14A ramp is the main Western alternative to TSMC at the leading edge. | A contract manufacturer sitting between optical components and the network and AI-datacenter OEMs whose brands ship the finished box. FY2026 revenue is 47.9% data center, 33.3% communications infrastructure and 18.8% automotive, industrial and other markets (FY2025: 46.2% / 30.7% / 23.1%), with Cisco, NVIDIA, Nokia and Amazon each above 10% of revenue. Fabrinet also integrates one layer down, designing and fabricating its own customized optics and glass — crystals, ferrules, precision glass tubing — at Fuzhou, China and Mountain Lakes, New Jersey, both for its own assemblies and for the merchant market, while volume manufacturing runs from the Pinehurst and Chonburi campuses in Thailand. | Applications-layer name in the AI chain: the 10-K describes designing 'nearly the entire solution' and using custom components 'available from only one source,' making Apple a large, concentrated buyer of leading-edge silicon rather than a supplier of AI compute to anyone else. |
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| Long-horizon vote | -0.24 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.05 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.11 at weight 0.20 · swarm bullish Editorial prior, not backtested. |