My 10 best ideas for companies with the strongest moats🧵

1. $Amazon.com(AMZN)$

Competitive Moat: It's marketplace receives more than 300 million visits every month creating strong network effects.

It currently operates 121 warehouses across the US which makes it impossible for any newcomer to match its selection and speed of delivery.

It has multi-billion businesses running on AWS that creates high switching costs. Plus, this segment has become increasingly capital intensive which makes the industry concentrate around the big providers.

- 5 year revenue CAGR: 13%

- Gross margin: 48%

- Forward P/E: 36

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2.

$Alphabet(GOOG)$

Competitive Moat: Its search processes trillions of queries annually, establishing an unparalleled data advantage and network effects. Every search refines its algorithms, creating a powerful winner-take-all dynamic in search.

Beyond search, Google's vast ecosystem of interconnected services, including YouTube, Android, Gmail, Maps, and Chrome, creates significant switching costs for users.

It's also investing massively in AI infrastructure which becomes even more powerful when combined with the other native services it provides.

- 5 year revenue CAGR: 17%

- Gross margin: 58%

- Forward P/E: 20

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3.

$NVIDIA(NVDA)$ Competitive Moat: Its CUDA has become the industry standard for parallel computing, creating developer lock-in and network effects.

Developer lock-in also makes switching to alternative hardware costly and disruptive, creating high switching costs.

CUDA has become so dominant that developers prefer running inference on $NVDA GPUs even though competitors offer more efficient alternatives.

Further, chip design is extremely capital intensive and firm spend substantial share of their revenue on R&D every year.

- 5 year revenue CAGR: 63%

- Gross margin: 75%

- Forward P/E: 33

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4.

$Meta Platforms, Inc.(META)$ Competitive Moat: Its apps capture over 3.5 billion daily active users, creating unmatched network effects and data advantages. It's nearly impossible for competitors to recreate the same social connections and engagement.

Computing capacity and ML infrastructure required to serve personalized content and ads at this scale requires tens of billions in investment.

It's nearly impossible scale a social media app from the ground while matching $META's infrastructure at the same time.

- 5 year revenue CAGR: 17%

- Gross margin: 81%

- Forward P/E: 28

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5.

$American Express(AXP)$ Competitive Moat: Its closed-loop network gives it unmatched data on both merchant and customer spending patterns, enabling superior fraud detection and targeted rewards.

Its average customer is also wealthier than average Visa or Mastercard customer which makes it both inflation and recession proof play.

Given that it's both the lender and processor, it can also double capitalize on the same network, which is something competitors can't do.

- 5 year revenue CAGR: 14%

- Gross margin: 60%

- Forward P/E: 20

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6.

$MercadoLibre(MELI)$

Competitive Moat: Its dominance in Latin American e-commerce (160M+ unique active users) creates powerful network effects that are enhanced by its integrated fintech solution Mercado Pago.

Its logistics network (Mercado Envios) spans complex geographies across multiple countries with 10,000+ pickup points, which is impossible to match by newcomers.

Its advantage in both e-commerce and digital payments creates a flywheel effect, making it particularly difficult for single-vertical competitors to challenge its position in emerging markets.

- 5 year revenue CAGR: 55%

- Gross margin: 52%

- Forward P/E: 56

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7.

$Nu Holdings Ltd.(NU)$ Competitive Moat: Its technology-first approach enables dramatically lower operating costs than traditional banks allowing it to profitably serve previously unbanked populations.

Its app's high engagement creates powerful network effects through its peer-to-peer payments and social features.

The data advantage from being the primary bank for millions of first-time banking customers creates superior credit assessment capabilities that traditional banks can't easily replicate.

- 5 year revenue CAGR: 80%

- Net interest margin: 9%

- Forward P/E: 26

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8.

$UnitedHealth(UNH)$ Competitive Moat: Its integrated model combining insurance with healthcare services creates unique data advantages and cost efficiencies that standalone insurers or providers can't match.

This scale gives it an unmatched bargaining power over drug developers and other healthcare providers.

The regulatory complexity and capital requirements of healthcare make it nearly impossible for new entrants to challenge its position across multiple segments simultaneously.

- 5 year revenue CAGR: 11%

- Gross margin: 22%

- Forward P/E: 17

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9.

$ASML Holding NV(ASML)$ Competitive Moat: Its monopoly in extreme ultraviolet (EUV) lithography machines is protected by over 40 years of R&D and 14,000 patents.

The complexity of these machines (100,000+ parts) has created a specialized supplier network that would take decades to replicate.

Major chip manufacturers like TSMC and Samsung have their manufacturing processes built around ASML's technology, creating massive switching costs.

- 5 year revenue CAGR: 14%

- Gross margin: 51%

- Forward P/E: 29

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10

Competitive Moat: It manufactures more than 90% of the most advanced chips in the world, including all chips for Apple and Nvidia.

It has 20% higher yields than the closest competitor in 3nm process and it's the only manufacturer that has viable yields in 2nm process.

This level of expertise makes it extremely risky for its customers to consider even switching to the alternatives.

- 5 year revenue CAGR: 16%

- Gross margin: 56%

- Forward P/E: 18

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