How do you identify wide-moat stocks?

To identify wide-moat stocks, look for businesses with powerful competitive advantages that will help them maintain and grow their market share. There are many types of moats, including lower supply costs than competitors, intangible assets, and a highly regarded brand. Make sure to review a company's financial statements, as wide-moat stocks are typically profitable businesses.

Are wide-moat stocks always a safe bet?

Wide-moat stocks tend to be less risky than other stocks, but that doesn't mean they're always safe. A company with a wide moat could have issues that lead to subpar returns. For example, management could make poor business decisions or lose some of its competitive advantages.

What are some examples of wide-moat stocks?

Visa, Microsoft, FICO, ASML, and Costco are all examples of wide-moat stocks. Each of them has competitive advantages over other companies in their respective industries, and they're all profitable.

What makes a stock's moat wide or narrow?

The length of time a competitive advantage is expected to last determines whether a stock's moat is wide or narrow. A wide moat means that a company should be able to maintain its competitive advantage for at least 20 years, according to Morningstar. A narrow moat means that it should be able to maintain its competitive advantage for at least 10 years.

What sectors typically have wide moat companies?

The consumer staples, information technology, and financial market sectors all have several wide-moat companies. However, you can find wide-moat stocks in every market sector.

What are the risks of investing in wide-moat stocks?

Potential regulatory issues and lack of innovation are the main risks of wide-moat stocks. Because of their dominant market positions, wide-moat companies are sometimes targets of regulators, especially if they're seen as monopolies. Companies with major competitive advantages don't always continue to innovate, which can lead to lackluster returns.

Can a wide-moat company lose its moat?

Yes, a wide-moat company can lose its moat for a variety of reasons, including increased competition, a poor customer experience, and technological disruptions. For example, BlackBerry (NYSE:BB) used to have a wide moat in the smartphone market, but it was slow to transition to touchscreen technology and lost its position to Apple's (NASDAQ:AAPL) iPhone and to Android devices.

5 Best Wide-Moat Stocks for 2026 and How to Invest

By Lyle Daly – Updated Jul 17, 2026 at 2:35 PM EST | Fact-checked by Parker Hicks

Key Points

Wide-moat stocks offer long-term profitability due to durable competitive advantages.
Top wide-moat companies include Visa, Microsoft, and Costco, noted for strong market positions.
Investors should focus on firms with high renewal rates and strong financials for stable returns.

Wide-moat stocks are companies with strong, sustainable advantages that protect them from competition. Their competitive advantages help maintain long-term profitability, making these companies sound investments.

Some wide-moat companies have recognizable brands that attract customers or enable them to charge premium prices. A company can build an economic moat by reducing its fixed costs below those of its competitors. Regulatory barriers can also serve as a moat, preventing other companies from entering a market.

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5 top wide-moat stocks for 2026

Ticker Information Table
Name and ticker	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Dividend yield	Industry
Visa (NYSE:V)	$676.8 billion	0.72%	Diversified Financial Services
Microsoft (NASDAQ:MSFT)	$3.7 trillion	0.71%	Software
Fair Isaac (NYSE:FICO)	$22.5 billion	0.00%	Software
ASML (NASDAQ:ASML)	$671.0 billion	0.52%	Semiconductors and Semiconductor Equipment
Costco Wholesale (NASDAQ:COST)	$420.3 billion	0.58%	Food and Staples Retailing

Data as of Aug 10, 2026. Showing 5 of 5 total entries.

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1. Visa

Visa (V -0.33%) isn't the only payment network, but it's the largest and most widely accepted, along with rival Mastercard (MA +0.04%). There were 4.9 billion Visa payment cards worldwide in 2025, enough for more than half the population of the planet to carry one.

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NYSE: V

Visa

Today's Change

(-0.33%) $-1.18

Current Price

$361.32

Key Data Points

Market Cap

$677B

Day's Range

$358.87 - $364.17

52wk Range

$293.89 - $373.97

Volume

7.5M

Avg Vol

8.2M

Gross Margin

77.16%

Dividend Yield

0.72%

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The key to Visa's business is its worldwide acceptance. In its 2025 fiscal year, Visa processed 257.5 billion transactions, resulting in $14.2 trillion in payment volume. Visa earns a percentage of every transaction. In 2025, it reported net income of $20.1 billion.

The payments landscape is changing, especially with the growth of stablecoins, cryptocurrencies that aim to maintain the same value as other assets, such as the U.S. dollar. To maintain its moat, Visa has set up its own stablecoin pilot program, which reached an annualized run rate of $7 billion in April 2026.

2. Microsoft

With its widely used software and cloud computing, Microsoft (MSFT +1.21%) has built a long list of enterprise customers. In 2020, it reported that 95% of the Fortune 500 ran on Azure, the company's cloud computing platform. Microsoft also has the world's leading operating system, with more than 50% of the desktop operating system market.

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NASDAQ: MSFT

Microsoft

Today's Change

(1.16%) $5.82

Current Price

$505.81

Key Data Points

Market Cap

$3.7T

Day's Range

$502.27 - $513.73

52wk Range

$349.20 - $553.72

Volume

23.3M

Avg Vol

41.2M

Gross Margin

67.94%

Dividend Yield

0.71%

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Microsoft's products integrate with each other, so switching costs are high, creating one of the wider moats among software companies. Once organizations start using Microsoft, they usually stick with it.

Although Microsoft is already one of the world's largest companies, it's still growing, with net income increasing 16% to $101.8 billion in 2025. It has gone through a slump due to concerns about its capital expenditures and the potential for AI to negatively impact software companies. But its enterprise adoption and large suite of popular products should help it defend its position.

3. Fair Isaac Corporation

Fair Isaac Corporation (FICO +0.80%), or FICO, is an analytics company that develops credit scoring models. It's the company behind the FICO® Score model, which is the industry standard for lending decisions. While there are other types of credit scores, 90% of top lenders use FICO® Scores.

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NYSE: FICO

Fair Isaac

Today's Change

(0.80%) $8.34

Current Price

$1,049.74

Key Data Points

Market Cap

$22B

Day's Range

$1029.35 - $1070.00

52wk Range

$870.01 - $1998.01

Volume

293.7K

Avg Vol

335.8K

Gross Margin

85.10%

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FICO charges financial institutions for its credit scores. It offers dozens of score types to serve various markets. There are FICO® Scores for credit card companies, auto lenders, and mortgage lenders. It also has subscription plans that consumers can purchase to stay on top of their credit.

On a negative note for FICO, Fannie Mae and Freddie Mac announced in April 2026 that they'd accept mortgages scored with VantageScore 4.0, a separate scoring model that competes with FICO. The decision tests FICO's moat, but it's still the leading credit score company. It also continues to deliver impressive financial growth, with revenue jumping 39% year over year to $691.7 million in its Q2 fiscal 2026.

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4. ASML

Semiconductors are a vital component of many of the technologies we use daily, including computers and smartphones, and the market is expected to surpass $1 trillion by 2030. ASML (ASML -0.27%) manufactures lithography systems, a key part of semiconductor production. Companies use lithography systems to etch patterns onto the wafers of their semiconductor chips.

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NASDAQ: ASML

ASML

Today's Change

(-0.43%) $-7.51

Current Price

$1,733.48

Key Data Points

Market Cap

$671B

Day's Range

$1732.81 - $1794.47

52wk Range

$716.20 - $1999.96

Volume

1.1M

Avg Vol

Gross Margin

52.73%

Dividend Yield

0.52%

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The most advanced chips, including top AI chips, require extreme ultraviolet (EUV) lithography. Producing an EUV lithography system is a massive undertaking, and there's currently only one company that does it -- ASML.

Its EUV lithography systems sell for hundreds of millions of dollars, and it has a backlog of orders from top tech companies. Customers include Taiwan Semiconductor Manufacturing (NASDAQ:TSM) and Intel (INTC -4.06%). It would require substantial time and money for any competitors to make inroads into its market share.

5. Costco

Warehouse club Costco (COST +0.52%) has a few key advantages over other retailers. For starters, it has more than 145 million members who pay an annual fee to shop at its stores. They tend to be loyal as well -- renewal rates typically exceed 90%.

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NASDAQ: COST

Costco Wholesale

Today's Change

(0.52%) $4.93

Current Price

$952.75

Key Data Points

Market Cap

$420B

Day's Range

$940.56 - $952.89

52wk Range

$844.06 - $1096.50

Volume

1.4M

Avg Vol

2.4M

Gross Margin

12.88%

Dividend Yield

0.58%

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Unlike other stores, Costco doesn't carry a huge variety of products. Warehouses carry about 4,000 stock-keeping units (SKUs), compared to about 30,000 at most supermarkets and 140,000 at a typical Walmart (WMT +0.63%).

Because Costco makes so much money from memberships, it can accept much lower profit margins than most retailers. Its relatively small product selection also gives it greater negotiating power with suppliers. Suppliers know that their products will have less competition at Costco and that shoppers trust Costco to stock only high-quality products.

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How to buy wide-moat stocks

Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for the wide-moat stock: Enter the ticker in the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in wide-moat stocks

Here are the biggest benefits of wide-moat stocks:

Wide-moat companies often outperform the market because of their competitive advantages.
Many wide-moat stocks have robust financials, with strong profit margins and annual revenue growth.
Wide-moat companies are generally better equipped to handle volatility and market downturns.
Wide-moat companies may have pricing power, able to raise prices while maintaining demand due to their strong brands.

However, investing in wide-moat stocks also carries a few notable risks:

Wide-moat stocks frequently trade at high valuations because investors recognize their advantages.
Management could become complacent with the company's position, leading to a loss of market share.
Moats can erode over time, especially during periods of rapid technological change.
Wide-moat companies sometimes face regulatory issues, such as antitrust lawsuits.

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Methodology: How these stocks were chosen

The stocks chosen for this list needed a specific moat capable of lasting 20 years or more. Criteria used to find companies with wide moats included high margins, strong renewal rates, positive and consistent free cash flow, and a stable balance sheet.

Selections span multiple industries and all five primary types of moats: intangible assets (FICO), switching costs (Microsoft), network effects (Visa), cost advantages (Costco), and efficient scale (ASML).

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Should you invest in wide moat stocks?

Owning wide-moat stocks is smart because they're among the most reliable long-term investments. Since these are profitable businesses, they have funds to invest in expansion, which supports growth. They can also return money to shareholders through dividends or stock buybacks.

These stocks also tend to be resilient during market fluctuations. They're established companies with strong customer bases, which provides them with more protection during economic downturns. They're not immune to bear markets, but they're well equipped to handle them.

You can invest in these businesses individually or through ETFs, such as the VanEck Morningstar Wide Moat ETF (MOAT +0.68%). Whichever you choose, wide moat stocks are worth having in your portfolio.

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Investing in wide-moat stocks: FAQ

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

TMFLyleDaly

@LyleDaly

Lyle Daly has positions in ASML. The Motley Fool has positions in and recommends ASML, Costco Wholesale, Intel, Mastercard, Microsoft, Visa, and Walmart. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.

5 Best Wide-Moat Stocks for 2026 and How to Invest

Key Points