Top Wide-Moat Stocks to Invest in for Long-term Growth

An updated edition of the January 5, 2026 article.

A wide moat refers to companies with lasting competitive advantages that protect them from rivals, similar to how a moat defends a castle. Made famous by Warren Buffett, this strategy targets businesses that can sustain strong long-term profitability due to factors like distinct market positions, strong brand loyalty, cost advantages, network effects and regulatory barriers.

Among the companies that exemplify wide economic moats are Lam Research Corporation LRCX, NVIDIA Corporation NVDA, ASML Holding N.V. ASML 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.

Wide-moat companies typically derive their advantage from factors such as strong brand recognition, network effects, high customer switching costs, regulatory hurdles and economies of scale. These elements create formidable challenges for new or existing rivals attempting to gain market share. Consequently, these firms often benefit from solid pricing power, stable profit margins, and the capacity to reinvest in their businesses, further reinforcing their long-term competitive edge.

The attraction of investing in wide-moat businesses stems from their ability to deliver steady, long-term returns. In contrast to companies in highly competitive industries, where profits are more vulnerable to pricing pressure and intense rivalry, wide-moat firms tend to show greater stability during economic downturns and market turbulence. Their solid market positions and robust balance sheets enable them to weather challenges that might severely impact less well-protected competitors.

Investing in wide-moat companies provides a solid strategy for building long-term wealth, as these businesses typically produce steady cash flows and deliver shareholder value through dividend payments and stock price growth. While no investment is entirely risk-free, companies with strong economic moats provide a level of durability that many investors seek in an ever-changing market. Our Wide Moat Screen makes it easy to identify high-potential stocks at any given time — just like the ones mentioned above. 

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4 Wide-Moat Stocks to Buy Now

Lam Research benefits from its leadership position in wafer fabrication equipment, specializing in etch and deposition technologies critical to semiconductor manufacturing. Its deep expertise, long-term customer relationships and the enormous capital requirements of its industry form a powerful competitive moat. Technology inflections in the semiconductor industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip integration, are expected to continue driving sustainable growth and increasing LRCX’s served market for its products and services in the deposition, etch and clean businesses. 

Lam Research has high exposure to the memory segment, which is likely to see tremendous growth in the long run. The semiconductor memory market is being driven by the growing proliferation of artificial intelligence (AI), Machine Learning, Blockchain, cloud computing, big data, mobile devices and the Internet of Things. The huge explosion of data as a result of these advanced technologies requires it to be stored, processed and analyzed to increase efficiency and drive the growth of the business. This has been leading to increased demand for memory chips. In addition, the increasing adoption of semiconductor components across various industries, including automotive, consumer electronics, and IT & telecom, still acts as a tailwind. 

Lam Research is at the center of the AI revolution, with its advanced fabrication tools playing a crucial role in enabling high-performance computing. Also, with AI applications requiring more efficient and high-speed memory, high-bandwidth memory adoption is accelerating. Additionally, Lam is benefiting from increased complexity in semiconductor manufacturing, where etch and deposition technologies are crucial. With AI-driven investments accelerating, Lam Research’s leading position in etch and deposition makes it a key beneficiary of the ongoing semiconductor spending cycle. These factors position this Zacks Rank #1 (Strong Buy) stock as a key enabler of next-generation AI chips. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA, a leader in graphics processing units (GPUs) and AI, possesses a technological moat that keeps it ahead of competitors. Its cutting-edge GPUs are essential for gaming, AI computing and data centers, creating strong demand across multiple industries. The company’s substantial investment in research and development ensures technological superiority, while its CUDA software ecosystem further locks in customers by making it difficult to switch to alternative platforms. 

Datacenter presents a solid growth opportunity for this Zacks Rank #2 (Buy) stock. As businesses are increasingly shifting toward cloud, the need for datacenters is increasing. To cater to this huge demand, datacenter operators like Amazon AMZN, Microsoft MSFT and Alphabet GOOG are expanding their operations across the world, which is driving demand for GPUs. Further, NVIDIA plans to focus on new growth boosters for its data center business, such as inference, data science and machine learning techniques, to consolidate its presence in this niche market.

NVIDIA is rapidly gaining traction in enterprise AI, expanding its market beyond cloud providers. Major companies across industries are integrating NVIDIA’s AI platforms to automate workflows, enhance productivity and improve decision-making. The company’s DGX Cloud AI infrastructure, which allows enterprises to train and deploy AI models at scale, has seen increased adoption. 

The generative AI revolution also continues to be a tailwind for NVIDIA. The company’s new GPU architectures, Hopper 300 and Blackwell, are rapidly gaining adoption as customers race to expand AI capabilities. Additionally, AI adoption is spreading beyond cloud hyperscalers, with industries such as healthcare, automotive, and robotics increasingly investing in AI-powered solutions. This diversification ensures that NVIDIA continues to grow beyond its traditional customer base.
 
ASML Holding, a vital supplier to the semiconductor industry, possesses one of the strongest technological moats in the world. Its technological leadership in lithography equipment makes it indispensable to the semiconductor industry. The company maintains a near-monopoly on extreme ultraviolet (EUV) lithography, which is essential for producing advanced chips at 3nm and below. Its EUV systems are crucial for leading chipmakers, positioning ASML as a key enabler of cutting-edge semiconductor manufacturing. The company’s technological superiority ensures high barriers to entry, giving it a competitive moat. 
  
ASML Holding’s High-NA EUV technology represents the next frontier in chip manufacturing. Designed for sub-2nm nodes, these advanced systems will be critical for the industry’s future. As chipmakers ramp up production of smaller, more powerful chips, ASML’s High-NA EUV tools will play a pivotal role, driving sustained demand. With EUV technology being essential for advanced semiconductor fabrication, ASML Holding’s dominance remains intact, supporting its long-term growth outlook.

ASML Holding, a Zacks Rank #2 stock, is well-positioned to capitalize on the AI revolution, which is driving massive demand for advanced semiconductors. With AI workloads requiring cutting-edge GPUs, high-bandwidth memory and AI accelerators, the demand for smaller and more powerful chips is rising. This trend plays directly into ASML’s hands, as its EUV and High-NA EUV machines are vital for manufacturing these advanced chips. As cloud providers, data centers and tech giants expand their AI infrastructure, ASML Holding’s lithography tools will be in greater demand.

Moody’s is a leader in credit ratings and analytics. Its position is fortified by regulatory reliance on its ratings and a reputation built over decades, creating high barriers for new entrants. Its dominant position in the credit rating industry, along with opportunistic acquisitions and restructuring efforts to diversify revenues and footprint, supports top-line expansion. A strong balance sheet position and earnings strength also keep the company’s capital distributions sustainable.

Moody’s has been meaningfully growing through strategic acquisitions, increasing scale and cross-selling opportunities across products and vertical markets. In August 2025, it announced its plans to secure a majority equity ownership in Middle East Rating & Investors Service. In June 2025, it fully acquired ICR Chile, strengthening its presence in Latin America’s domestic credit markets. In 2024, it announced the acquisition of Numerated Growth Technologies and a 100% stake in Global Credit Rating Company Limited (GCR) to deepen its presence in Africa’s credit market. These deals, along with several other strategic buyouts, will continue helping the company diversify revenues and be accretive to earnings. Moody's will continue to pursue opportunistic deals that are strategic fits and complement its existing operations.

Moody’s continues to pursue growth in areas outside the core credit ratings service. This Zacks Rank #2 company has increased its exposure to the banking and insurance industries and is diversifying into fast-growing professional services and enterprise risk solutions (ERS) businesses. The rising share of the analytics business, which is not correlated with the volatility of interest rates, has added stability to top-line growth. 

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This article originally published on Zacks Investment Research (zacks.com).

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