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.
| Microsoft | FormFactor | Core Scientific | |
|---|---|---|---|
| Moat rating | wide The FY2026 10-K (filed 2026-07-29) restates both structural mechanisms verbatim. On cost: the cloud business 'benefits from three economies of scale' — datacenters with 'significantly lower cost per unit than smaller ones', demand aggregation, and multi-tenancy that lowers maintenance labor. On ecosystem: 'A well-established ecosystem creates beneficial network effects among users, application developers, and the platform provider that can accelerate growth.' Both are load-bearing at the new scale — 'Microsoft Cloud revenue increased 27% to $214.4 billion' and 'Commercial remaining performance obligation increased 84% to $678 billion.' Rated wide but held below full confidence because the same filing still cautions that 'Barriers to entry in many of our businesses are low.' | narrow An independent tracker places FormFactor in a small group of suppliers, but the same tracker expects it to lose the top spot. TrendForce's June 2026 report on the probe card market (Part 2, 2026-06-26, https://www.trendforce.com/research/download/RP260626XO3) says 'FormFactor, Technoprobe, and MJC dominate, while Taiwan's CHPT, MPI, and WinWay gain share riding the AI wave'. It describes the economics as 'Consumable probe tips create a high-margin hardware subscription model; repair and replacement fees are key profit drivers'. Its outlook reads: 'Total revenue is forecast to surge sharply in 2026, with Technoprobe poised to overtake FormFactor as the top global supplier.' FormFactor's own margins over the last three fiscal years do not show exceptional returns. TradingPilot's fundamentals record from the FY2025 10-K (https://www.sec.gov/Archives/edgar/data/1039399/000103939926000009/0001039399-26-000009-index.htm) shows gross profit of $258.6M on $663.1M of revenue in FY2023, $307.9M on $763.6M in FY2024 and $308.9M on $785.0M in FY2025. Gross margin has since risen to 50.7% (GAAP) in Q2 2026. A defended place among three dominant suppliers, but one whose rank is slipping to a rival, is a narrow moat rather than a wide one. | narrow Core Scientific's position rests on long-dated, take-or-pay leases of energized capacity, not on a protected market. Its 2025 Form 10-K (filed 2026-03-02) says wholesale colocation "typically involves large, long-term agreements with a limited number of customers, often with initial terms of 10 years or more". It adds that such leases are frequently paired with take-or-pay commitments "under which the customer is obligated to pay for leased customer power capacity regardless of utilization, providing operators with revenue visibility over the contract term." On the Q2 2026 call (2026-07-28, https://d1io3yog0oux5.cloudfront.net/_fda3a1f2f1890adaa7ac6c4d9d310971/corescientific/db/1085/11280/prepared_remarks/2Q26+Prepared+Remarks+Transcript+PDF.pdf) management said the company "now has approximately 1.1 gigawatts of total contracted billable capacity, representing more than $24 billion of base contracted revenue". That total combines CoreWeave's 590 MW, on what the CFO called "the 12-year lease terms", with AMD agreements for 530 MW that carry "more than $14 billion of base contracted revenue across the 15-year agreements with 2.5% annual escalators". Management also said it was "currently billing for 437 megawatts of capacity". The limits are just as clear. The 10-K says "Competitors compete on price, facility location, reputation and perceived skill with respect to performance" and that many rivals "are more established, have better brand recognition, are well capitalized". It also says "One customer, CoreWeave, currently accounts for 100% of our Colocation segment revenue." The Q2 2026 10-Q says a material weakness tied to converting mining facilities to HPC "has not been remediated". Long take-or-pay terms are the norm in wholesale colocation, so the contracts alone are contracted revenue, not an edge over rivals. What supports narrow is capacity already billing and a tenant that has expanded in place, and even that is bound to those contracts and to one customer today, so the band is narrow, not wide. |
| Moat type | network effects The FY2026 10-K keeps the ecosystem passage scoped to the firm: 'An important element of our business model has been to create platform-based ecosystems on which many participants can build diverse solutions. A well-established ecosystem creates beneficial network effects among users, application developers, and the platform provider that can accelerate growth.' That remains the one moat mechanism the filing asserts about Microsoft as a whole; the cost-of-scale passage stays scoped to 'our cloud business'. | intangibles ip The tracker locates the advantage in proprietary probe technology. TrendForce's Part 1 report (2026-06-23, https://www.trendforce.com/research/download/RP260623JC3) says 'MEMS has become the mainstream probe process; proprietary tip alloy formulas are now the key differentiator for current capacity and longevity'. FormFactor's own example is SmartMatrix, its full-wafer contactor for high-bandwidth memory (HBM). On the Q1 2026 call (https://www.fool.com/earnings/call-transcripts/2026/04/29/formfactor-form-q1-2026-earnings-transcript/), management called it 'FormFactor's differentiated Smart Matrix full wafer contactor technology'. The consumable-tip model TrendForce describes is a recurring-revenue feature of the product rather than a separate lock-in, so intangibles/IP is the better-supported moat source. | switching costs The lock-in is contractual and physical. The 10-K's description of colocation is that "Customers deploy and manage their own hardware, while the operator designs, builds and operates the underlying infrastructure", under take-or-pay leases "often with initial terms of 10 years or more". On the Q2 2026 call the COO described the AMD program as "an integrated colocation platform engineered to support AMD's Helios Rack-Scale systems" with a "close-coupled AMD design framework". Leaving would mean rebuilding that power, cooling and fit-out elsewhere. The relationship with CoreWeave shows the stickiness: it "began with a 16-megawatt lease at our Austin campus in 2024 and has since expanded to 590 megawatts of total contracted capacity". Intellectual property is not the source. The 10-K says the company has "filed over 130 patent applications" but that these laws and procedures "provide only limited protection". Scale is not the source either: the 10-K says rivals are "well capitalized" and some are organized to lower "their external cost of capital". |
| Leadership | co leader The FY2026 10-K asserts leadership nowhere. Its AI offerings 'compete with AI products from hyperscalers, as well as products from other emerging competitors and other open-source offerings, many of which are also current or potential partners' — one of a small set at hyperscale in cloud and AI, an incumbent in productivity and PC operating systems. | co leader TrendForce's Part 2 report (2026-06-26) names 'FormFactor, Technoprobe, and MJC' as the dominant suppliers and says 'Total revenue is forecast to surge sharply in 2026, with Technoprobe poised to overtake FormFactor as the top global supplier', which implies FormFactor holds the top rank now and that TrendForce expects it to lose that rank. In logic, the rival reports a large position. Technoprobe's May 2026 company presentation (https://www.technoprobe.com/wp-content/uploads/2026/05/Technoprobe-Company-Presentation-May-2026.pdf, citing Yole's Q3 2024 test consumables monitor) gives Technoprobe 'Market Share: 34%' of the $1.6 billion 2024 logic probe card market and 60% of the $937 million MEMS logic probe card market. TrendForce gives no percentage for FormFactor. A shared front rank, with the overall lead forecast to pass to Technoprobe, is co-leadership. | fast follower No independent share or rank was found. The 10-K lists Aligned Data Centers, Compass Datacenters, Equinix, Digital Realty Trust, NTT, QTS, Switch, Vantage Data Centers and CyrusOne as HDC competitors and says "Many of these competitors are more established, have better brand recognition, are well capitalized". It separately names Applied Digital, Cipher Mining, Galaxy Digital, Hut 8, IREN and TeraWulf as miners converting facilities for AI and HPC customers. Against that field Core Scientific is scaling quickly from a small base: 437 MW billing and about 1.1 GW contracted at the Q2 2026 call. That makes it a fast follower behind larger incumbents. Its press releases describe the company as "a leader in designing, building and operating large scale, purpose-built data centers", but that is the company's own claim and is not counted. |
| Pricing power | strong The FY2026 10-K reports 'Gross margin increased $31.6 billion or 16% with growth across each of our segments', with 'Microsoft 365 Commercial revenue ... mainly affected by a combination of continued installed base growth and average revenue per user expansion'. The honest caveat: gross margin percentage 'decreased slightly driven by continued investments in AI infrastructure and growing AI product usage', with Microsoft Cloud gross margin down to 66%. | moderate Gross margin sat near 39-40% for three years, per TradingPilot's fundamentals record from the FY2025 10-K ($258.6M on $663.1M, $307.9M on $763.6M and $308.9M on $785.0M for FY2023-FY2025). It then jumped. The Q2 2026 results release (https://seekingalpha.com/pr/20600102, 2026-07-29) reports GAAP gross margin of 50.7%, against 38.4% in Q1 2026 and 37.3% in Q2 2025, and guides Q3 2026 to 52.0% plus or minus 1.5%. Management attributes the gain to cost and yield rather than price. On the Q1 2026 call it said 'pricing really is not a driver of the gross margin improvement. It's COGS reduction and our operations team continuing to improve yields and cycle times'. TrendForce describes consumable probe tips as 'a high-margin hardware subscription model'. Margins are higher now, but FormFactor itself does not credit price for the improvement. | moderate Price is set competitively at signing and then locked in. The 10-K says "Competitors compete on price" and warns that "If we fail to accurately estimate the factors upon which we base our contract pricing, we may generate less profit than expected or incur losses on those contracts". Once signed, the AMD agreements carry "2.5% annual escalators" (Q2 2026 call), and the Q2 2026 10-Q says "power costs are passed through to our customer without markup". To win AMD, the company also gave AMD "market-priced warrants to purchase Core Scientific's common stock, subject to certain commercial conditions" (AMD release, 2026-07-28, https://investors.corescientific.com/news-events/press-releases/detail/138/core-scientific-and-amd-announce-infrastructure-partnership). In Q2 2026, colocation revenue was $136,669 thousand and the cost of colocation services was $56,686 thousand, including $35,073 thousand of power fees passed through to the customer (10-Q). Contracted escalators protect price over a 12- to 15-year term, but nothing shows a premium over rivals, so pricing power is moderate. |
| Summary | One repeated model across segments — build a platform, attract developers and partners, monetize the ecosystem that forms — now compounding through the AI wave: FY2026 revenue rose 18 percent 'driven by growth in Microsoft Cloud', Azure and other cloud services grew 41 percent, and the commercial remaining performance obligation reached $678 billion, while the filing still concedes low barriers to entry in many businesses. | FormFactor makes probe cards, the consumable interfaces used to test chips at wafer level, for foundry and logic customers and for DRAM including HBM. It also has a Systems business, whose co-packaged-optics probing products management said on the Q1 2026 call were ramping. TrendForce's June 2026 probe card reports name FormFactor, Technoprobe and MJC as the dominant suppliers. They say MEMS probes are now mainstream, with 'proprietary tip alloy formulas' the key differentiator. They describe consumable probe tips as 'a high-margin hardware subscription model', with order visibility stretching 'from one quarter to up to two years'. FormFactor is benefiting: Q2 2026 revenue was $258.2 million, up 31.9% year over year, and GAAP gross margin was 50.7% against 37.3% a year earlier. On the Q1 2026 call, management said a second HBM customer was increasing adoption of SmartMatrix, and that networking probe cards had made a leader in high-performance compute a 10% customer. The limits are competitive. TrendForce forecasts that Technoprobe will overtake FormFactor as the top global supplier in 2026, and says Taiwanese suppliers CHPT, MPI and WinWay are gaining share. Technoprobe's May 2026 presentation, citing Yole, puts its own share at 34% of the 2024 logic probe card market and 60% of MEMS logic probe cards. | Core Scientific began as a bitcoin miner and is turning its sites into high-density colocation (HDC) data centres for AI and HPC tenants. At 31 December 2025 it owned or leased ten data centres across seven U.S. states, with "approximately 1.4 gigawatts ("GW") of gross utility power capacity, or approximately 920 megawatts ("MW") of total leasable customer power capacity", and it intends "to convert every megawatt in our portfolio to high-density colocation infrastructure over the next three years" (2025 10-K). The transition is now visible in the numbers: colocation revenue "represented 77% of total revenue" in the first half of 2026, against 12% a year earlier (Q2 2026 10-Q). By July 2026 the company was billing for 437 MW. It had about 1.1 GW contracted with two anchor customers, CoreWeave at 590 MW and AMD at 530 MW (about 380 MW leased directly to AMD and about 150 MW for a neocloud that AMD backs), and AMD holds an exclusive right, under specified conditions, to lease as much as 2 additional gigawatts (Q2 2026 call). Those long take-or-pay contracts, plus energized power at a time when the 10-K says utilities demand "significant collateral postings at contract execution" and large builds take "18 to 24 months, or longer", are the source of a narrow advantage. They do not make a protected franchise. The 10-K names nine established colocation providers and six converted miners as competitors, says competitors "compete on price", and reports that CoreWeave was 100 percent of colocation revenue. The Q2 2026 10-Q says colocation revenue "is concentrated with a single customer" and that the conversion-related material weakness is still unremediated. Build costs are "approximately $11 million to $12 million per megawatt" (Q2 2026 call), and the company expects to finance the AMD build-out through project-level bonds. Core Scientific is rated as having a narrow moat: contract-bound switching costs, with no evidence of a price premium or a scale advantage. |
| Chain position | Hyperscale AI-infrastructure buyer and platform distributor: monetizes upstream compute through Azure, Microsoft 365 Copilot, and the developer ecosystem. | A wafer-test consumables supplier between chipmakers and tester makers. Its customers include HBM and DRAM makers and foundry/logic chip designers. TrendForce's Part 1 report (2026-06-23) says 'Advantest and Teradyne have taken stakes in Technoprobe, FormFactor, and MJC, signaling accelerated vertical integration ahead.' | Core Scientific leases powered, liquid-cooled data-centre capacity to AI compute providers: CoreWeave (590 MW) and AMD, including a neocloud that AMD backs (about 530 MW), per the Q2 2026 call. It sits between utilities and GPU cloud operators while it winds down bitcoin self-mining. |
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| Long-horizon vote | +0.35 at weight 0.20 · swarm bullish Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.06 at weight 0.20 · swarm bullish Editorial prior, not backtested. |