Competitive Moat

Extracted Attributes

• Core Analogy

  A medieval castle's moat protecting it from rivals

• Primary Sources

  Network effect, intangible assets, cost advantage, switching costs, and efficient scale

• Concept Originator

  Warren Buffett

• Wide Moat Duration

  20 years or more of expected competitive advantage

• Modern Moat Drivers

  Deep tech development and AI infrastructure dominance

• Narrow Moat Duration

  10 to 20 years of expected competitive advantage

Timeline

• Morningstar Inc. and Morgan Stanley establish a systematic framework for measuring economic moats using five key sources. (Source: Morgan Stanley Research)

  2002-06-01

• Morgan Stanley updates the 'Measuring the Moat' research report to include more comprehensive data on ROIC and intangible investments. (Source: Morgan Stanley Research)

  2016-01-01

• The All-In Podcast discusses Nvidia's massive earnings and the role of deep tech in building modern competitive moats. (Source: All-In Podcast Episode 167)

  2024-02-21

Economic moat

An economic moat, often attributed to investor Warren Buffett, is a term used to describe a company's competitive advantage. Like a moat protects a castle, certain advantages help protect companies from their competitors.

Web Search Results

• What Is a Competitive Moat?

  A competitive moat (Warren Buffet calls these "economic moats") is a major advantage you have over your direct competition. That's pretty vague, but there are so many potential things that could make up your moat that it's hard to be too specific. If there's something that's giving your company a business advantage in your market, it could be your competitive moat. [...] ## Why competitive moats matter to investors Competitive moats are a stock investor's favorite thing. Because competitive moats give a company an untouchable advantage, they're likely to be companies that can last over the long term. If you're working a buy-and-hold strategy, finding companies with wide moats is like finding chunks of gold in your potting soil mix. [...] Cost moats refer to different cost-related protections. Obviously, consistent price advantage is a huge moat for a lot of companies, and this is usually achieved with economies of scale. But cost moats can also speak to switching costs, which can create an environment where it puts a customer at a disadvantage to switch from your company to a competitor.

• Wide Moat Stocks - Nasdaq

  Below you'll find the top scoring wide moat stocks. Wide moat stocks typically have significant competitive advantages that allow them to fight off competition and maintain high profitability and returns on capital. A moat can come in several forms. Some firms create moats through a superior brand. Others do it via pricing power that competitors can't match. Still others do it through operational advantages. The system used to identify moats is based on the criteria adapted from a strategy

• The 10 Most Powerful Economic Moats and the Companies That ...

  In the world of business and investing, few concepts are as valuable as the economic moat. Popularized by Warren Buffett, a moat represents a company’s ability to maintain competitive advantages over its rivals in order to protect long-term profits and market share. Just as a medieval castle was safeguarded by a wide moat, a strong business moat defends a company from competitors eager to chip away at its success. [...] Economic moats are not just academic concepts. They are real-world advantages that help businesses thrive while competitors struggle. For investors, recognizing these moats can help identify durable, long-term winners. For business leaders, building and widening a moat is often the key to staying ahead. Whether it’s the brand power of Ferrari, the network effects of Airbnb, or the ecosystem lock-in of Adobe, the strongest companies don’t just compete. They protect.

• [PDF] Measuring the Moat - Morgan Stanley

  used the analogy of an economic moat around the business to capture the notion of sustainable competitive advantage. He said that moats should ideally be deep and wide so as to fend off marauders. Further, he has suggested that moats are almost always widening or narrowing, even if those changes are hard to perceive in the short run.17 While he seeks businesses that will succeed today as well as over time, he looks for executives who prioritize widening the moat over delivering short-term [...] results.18 Morningstar Inc., a financial services firm, uses five perceived sources of moats—network effect, intangible assets, cost advantage, switching costs, and efficient scale—and designates an economic moat rating for many of the companies of the stocks it follows. They define a company as having a wide moat if its competitive advantage is expected to last for more than 20 years, a narrow moat for 10 to 20 years, and no moat if competitive advantage is transient or nonexistent.19 Exhibit [...] Economic Moat Ratings, June 2002-June 2024 Source: Counterpoint Global and Morningstar Direct. This report seeks to provide a systematic framework for measuring a company’s moat. We published the first version of this research in 2002 and updated it in 2016. This edition has more comprehensive data and analysis, especially with the use of ROIC, accounts for intangible investments, provides new work on company life cycles, and reflects some of the latest studies from the academic and

• Top Wide-Moat Stocks to Invest in for Long-Term Wealth and Stability

  An updated edition of the September 19, 2025 article. A wide moat describes companies with durable competitive advantages that shield them from rivals and support lasting profitability. Popularized by Warren Buffett, the term draws an analogy to a medieval castle protected by a broad moat — making it hard for competitors to breach or threaten the company’s market position. [...] Among the companies that exemplify wide economic moats are Lam Research Corporation LRCX, ASML Holding N.V. ASML, NVIDIA Corporation NVDA and Moody's Corporation MCO. These companies compete in industries with significant barriers to entry, which safeguard their market positions and promote consistent revenue growth by reducing the risk of new competitors. [...] The appeal of investing in wide-moat companies lies in their capacity to generate stable, long-term returns. Unlike firms in intensely competitive industries — where profits often fluctuate amid price wars and rivalry — wide-moat businesses typically demonstrate stronger resilience during economic slowdowns and market volatility. Their dominant market positions and sound financial foundations help them withstand challenges that could severely affect less defensible competitors.