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.
| TE Connectivity | Arm Holdings | Vistra | |
|---|---|---|---|
| Moat rating | narrow The FY2025 10-K's own Competition section undercuts any claim of insulation: 'The industries in which we operate are highly competitive, and we compete with thousands of companies that range from large multinational corporations to local manufacturers', competition is 'generally based on breadth of product offering, product innovation, price, quality, delivery, and service', and TE has 'experienced, and expect[s] to continue to experience, downward pressure on prices'. The same filing explicitly disclaims IP as the basis of its position: 'we do not believe that our competitive position or our operations are dependent upon or would be materially impacted by any single patent or group of related patents.' What TE does hold is durable rather than absolute — it calls itself 'one of the leading providers of advanced automobile connectivity solutions', its Industrial segment 'a leading supplier', and it converted that position into rising profitability across the same filing's three income statements (gross margin 31.5% of net sales in FY2023, 34.4% in FY2024, 35.2% in FY2025). A position that earns expanding margins into admitted price pressure is an advantage; one held against thousands of competitors and no decisive patent is not a wide one. | wide Arm's FY2026 20-F states it "maintained market share in the mobile applications processor market of greater than 99% for many years," and describes the Arm platform as "the most pervasive architecture in the world," with "more than 350 billion Arm-based chips reported as shipped cumulatively" as of March 31, 2026 — a durable, dominant position. | narrow The 10-K states that "the majority of our facilities operate as “merchant” facilities without long-term power sales agreements" and that Vistra is "not guaranteed any rate of return on our capital investments". Against that, the scarcity is real: six NRC-licensed nuclear units totalling 6,448 MW, licences running 2036-2053, inside a 43,641 MW fleet, plus 20-year PPAs with AWS (1,200 MW) and Meta (2,609 MW). The 2025 gas additions - Lotus (2,600 MW, closed October 2025) and pending Cogentrix (5,500 MW) - extend the merchant gas side, not the nuclear scarcity. Only the 433 MW of uprates extends the moat asset. |
| Moat type | switching costs The FY2025 10-K locates the advantage at the customer, not in patents. It describes 'close working relationships with many of our customers' whose 'relationships with them typically date back many years', and co-development as the mechanism: 'By working with our customers in developing new products and technologies, we believe we can identify and act on trends and leverage knowledge about next-generation technology across our products.' Roughly 75% of fiscal 2025 net sales were direct to manufacturers rather than through distribution, and the Transportation segment's products 'must withstand harsh conditions' — parts engineered in with the customer and built to survive the application, so the position sits inside the customer's design rather than in a purchase order. The filing rules the alternative out in its own words on intellectual property, so intangibles_ip is not the source; the 'thousands of companies' in Competition rules out efficient_scale. | intangibles ip Per the 20-F, Arm's advantage rests on its proprietary CPU architecture (ISA), which "is essentially a common language for software developers" and "sets the foundation for a large library of compatible software," reinforced by switching costs: customers "likely would incur significant costs in switching to competitors' architecture." | intangibles ip The intangibles are non-replicable regulatory assets rather than patents: six nuclear licences (Comanche Peak 2050/2053, Perry 2046, Davis-Besse 2037, Beaver Valley 2036/2047), fuel "contracted to support all our refueling needs through 2030", section 45U credits "recognizing the value of existing carbon-free nuclear power", and TXU Energy, sold "for over 20 years" and "registered and protected by trademark law". Read 45U as a floor, not moat strength: the 2025 credit was $220m against $545m in 2024, and it "provides increasing levels of support as unit revenues decline". Efficient scale does not apply. |
| Leadership | co leader The FY2025 10-K claims leadership in qualified form and then names the peers who contest it. Transportation Solutions 'is a leader in connectivity and sensor technologies' and TE is 'one of the leading providers of advanced automobile connectivity solutions' — one of, not the — while the segment's 'major competitors include Yazaki, Aptiv, Sumitomo, Sensata, Honeywell, Molex, and Amphenol'. Industrial Solutions 'is a leading supplier of products that connect and distribute power, data, and signals' and 'competes primarily against Amphenol, Hubbell, Carlisle Companies, Integer Holdings, Molex, Omron, JST, and Korea Electric Terminal (KET)'. Amphenol and Molex appear on both lists, so TE shares the top of the interconnect market rather than owning it. | clear leader 20-F: >99% share of the mobile applications processor market for many years and "the most pervasive architecture in the world"; principal contested arena is the fast-growing data-center CPU market, where Arm is still a challenger to x86. | co leader Vistra describes itself as "one of the largest producers of power in deregulated markets in the U.S." with over 230 TWh generated, "one of the largest competitive power generators in the U.S. as measured by MWh of generation capacity", "one of the largest electricity generators in the U.S.", and "one of the largest competitive residential retail electricity providers". That hedged phrasing appears four times and is the strongest claim the filing makes. The 10-K names no competitor and assigns no rank, so co-leader is the ceiling the disclosure supports. |
| Pricing power | moderate The FY2025 10-K states both halves plainly: TE has 'experienced, and expect[s] to continue to experience, downward pressure on prices. However, as a result of increased costs and tariffs, certain of our businesses implemented price increases in recent years.' Pass-through, not price-setting. The realised result is margin expansion rather than erosion — gross margin of 31.5% of net sales in FY2023, 34.4% in FY2024 and 35.2% in FY2025 per the same filing's income statements, and 36.5% ($5,319M on $14,573M) for the nine months to 26 June 2026 versus 35.3% a year earlier, with Q3 FY2026 GAAP operating margin of 19%, per the 22 July 2026 results release (https://www.sec.gov/Archives/edgar/data/1385157/000110465926085589/tel-20260722xex99d1.htm). Strong would require pricing that leads rather than follows cost; weak is contradicted by three years of expanding gross margin. | strong GAAP gross margin was ~98% in FY2026 ($4,799M gross profit on $4,920M revenue), up from 97% (FY2025) and 95% (FY2024), and royalty growth was driven by "an improved mix of products with higher royalty rates per chip, such as Armv9 technology" — evidence of per-chip pricing power. Caveat: the 20-F notes ASPs decline over a chip generation and royalty per chip generally falls as volume rises. | weak Vistra is a merchant price taker. Price formation rests on "the highest variable cost unit that clears the market", prices are "unpredictable and may fluctuate substantially", hedging markets have "limited liquidity after two to three years", and competing retailers "may offer different products, lower electricity prices and other incentives". ERCOT's $2,000/MWh figure is the low system-wide offer cap, applied conditionally when the peaker net margin exceeds three times CONE or under the PUCT Emergency Pricing Program, not a standing cap. PJM has "announced that it would propose" extending its capacity cap to 2028-29 and 2029-30, subject to FERC approval. |
| Summary | TE Connectivity sells the connectors, terminals, sensors and cable-protection parts that, in its own framing, 'enable the distribution of power, signal, and data' — a component vendor, never a system or compute vendor. The FY2025 10-K puts the two reportable segments, Transportation Solutions (54% of net sales) and Industrial Solutions (46%), against a combined served market it estimates at roughly $200 billion, which tells you immediately that no single share number governs this business: the filing discloses no market share, says 'no single customer accounted for a significant amount of our net sales in fiscal 2025, 2024, or 2023', and states that because TE is 'not organized by product or service, it is not practicable to disclose net sales by product or service'. The defensible part is entrenchment. Parts get designed in with the customer and then qualified to survive automotive, aerospace, subsea and grid conditions; TE sells about 75% of net sales direct into ~130 countries; relationships 'typically date back many years'. That is a switching-cost moat, and the filing is unusually candid that it is not a patent moat — no single patent or group of patents is material to its competitive position. The limit is equally plain in the filing: highly competitive industries, thousands of competitors, and persistent downward price pressure, with Amphenol and Molex named as competitors in BOTH segments and Yazaki, Aptiv and Sumitomo heading the Transportation segment's competitor list. The evidence that the moat is nonetheless working is margin plus mix. Gross margin ran 31.5% / 34.4% / 35.2% of net sales across FY2023-FY2025, and in the nine months to 26 June 2026 gross margin was $5,319M on $14,573M of net sales (36.5%) against $4,419M on $12,513M (35.3%) a year earlier, while Q3 FY2026 GAAP operating margin was 19% and orders hit a record $5.7 billion, up 27% year over year. Growth has also rotated: digital data networks grew 34.2% in Q3 FY2026 (34.0% organic) and 48.8% over nine months, with the CEO naming 'increased momentum in AI in both the data center and across the broader energy infrastructure' — while sensors, an end market for which the 10-K makes no leadership claim at all, shrank 2.8% organically in the quarter. Narrow, not wide: a real toll on other people's platforms, collected under admitted price pressure. | Arm's durable advantage is its proprietary CPU architecture plus the software ecosystem locked to it: as of March 31, 2026 more than 350 billion Arm-based chips had shipped cumulatively, the platform "supports a global community of more than 22 million developers" and "runs the vast majority of the world's software," which underpins its greater-than-99% share of mobile application processors held "for many years." | Vistra's moat is one scarce asset wrapped in a commodity business. Six NRC-licensed nuclear units - 6,448 MW, licences running 2036-2053 - sit inside a 43,641 MW fleet that the 10-K says operates in the majority as "merchant" facilities with no long-term power sales agreements and no guaranteed rate of return. That block cannot be rebuilt by a rival, and is now partly de-risked by 20-year PPAs with AWS (1,200 MW from Comanche Peak) and Meta (2,609 MW from the PJM plants) plus section 45U credits. Everything else - 26,989 MW of gas, 8,743 MW of coal, the 5m-customer retail book - competes on price in markets Vistra does not set, against entrants the filing says keep building "despite relatively low power prices". The 2025 growth was gas M&A (Lotus, pending Cogentrix), which widens the commodity-exposed side. Narrow, for a specific reason: the moat is 15% of the fleet. |
| Chain position | TE is an upstream component supplier to the AI build-out, not a participant in compute. It sells 'connectivity and sensor solutions [that] enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence', about 75% of it direct to manufacturers across roughly 130 countries. AI exposure runs through one end market: digital data networks was 28% of Industrial Solutions, and Industrial Solutions was 46% of fiscal 2025 net sales — so the datacenter line is a minority of a company still 54% transportation. That minority is where the growth now is: digital data networks net sales rose 34.2% in Q3 FY2026 and 48.8% over the nine months, and energy rose 34.4% in the quarter, the CEO tying both to AI momentum 'in both the data center and across the broader energy infrastructure' (https://www.sec.gov/Archives/edgar/data/1385157/000110465926085589/tel-20260722xex99d1.htm). | Arm licenses the CPU architecture and core IP that sit at the foundation of nearly all mobile SoCs and a growing share of AI/cloud data-center CPUs (CSP in-house Grace/Graviton-class designs and Arm's own AGI data-center CPU), placing it upstream of much of the AI compute stack. | Merchant IPP: sells energy, capacity and ancillary services into ISO/RTO spot and short-term wholesale markets (ERCOT, PJM, ISO-NE, NYISO, CAISO, MISO) and resells to ~5m retail customers. Emerging role as long-term nuclear offtake supplier to hyperscalers (AWS, Meta). Not a price setter at any link. |
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| Long-horizon vote | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.42 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.05 at weight 0.20 · swarm neutral Editorial prior, not backtested. |