CQI V5.0

Compounding Quality Index — Moat Ranking

39 Companies | 6 Industries | 14 Dimensions | 42 Sub-factors

Rating Date: March 2026 | Data Window: 2014-2025 (11 years)

v5.0: Dual-dimension trend refinement (structural widening vs execution gain) + trend driver annotations

Full Ranking

#	Company	Ticker	CQI	Trend	Trend Driver	Report	Comment
1	Copart	CPRT	82	Execution gain	ADAS total loss rate ↑ + international expansion	Read	Two-sided auction network + irreplicable land bank — the only counter-cyclical monopolist
2	S&P Global	SPGI	74	Stable	Institutional lock-in solid, no change signals	Read	Basel III-locked rating duopoly, pricing power still largely untapped
3	FICO	FICO	72	Active erosion	FHFA approved VantageScore, opening institutional crack	Soon	Institutional monopoly pricing being unlocked, but the institution itself is being opened
4	Moody's	MCO	70	Stable	Rating institution shows no loosening	Soon	Rating duopoly, MIS is a 60%+ OPM cash machine — MA growth is the key variable
5	Microsoft	MSFT	67	Stable	Office/Azure lock-in solid, AI investment offsets	Read	Enterprise OS monopoly, but AI arms race is eating into margins
6	Alphabet	GOOGL	66	Execution gain	Gemini rolling out across all product lines	Read	Knowledge gateway tollbooth — Gemini ecosystem rollout is widening the AI moat
7	ASML	ASML	59	Stable	EUV exclusive position unchanged	Read	The only lithography maker — humanity's most precise bottleneck
8	Costco	COST	59	Execution gain	Member base still growing, 93% renewal rate holding	Read	Intentionally earns nothing on goods — 93% membership renewal and still growing
9	Meta	META	58	Stable	Ad targeting advantage solid, AI investment offsets	Read	3.9B user behavioral database — unmatched ad targeting precision
10	Amazon	AMZN	56	Execution gain	AWS + logistics + advertising triple flywheel accelerating	Read	Unmatched three-engine flywheel, but $200B CapEx is a faith test
11	IDEXX	IDXX	56	Stable	Consumable lock-in model unchanged	Soon	Install the analyzer, lock in the consumables — a vet diagnostics razor-blade model
12	Apple	AAPL	55	Structural erosion	Global antitrust dismantling walled garden (DMA/DOJ)	Read	Deepest consumer ecosystem, but regulators are dismantling the walled garden
13	Visa	V	53	Structural erosion	FedNow/UPI real-time payments eroding + fee regulation	Soon	World's largest payment network, but fee regulation + real-time payments rising
14	KLA Corp	KLAC	52	Structural widening	Advanced node physics → inspection density irreversibly rising	Read	Invisible yield gatekeeper — the smaller the chip, the more essential KLA becomes
15	Cintas	CTAS	51	Stable	Density + cross-sell model stable	Soon	Uniforms + mats + first aid — each added layer doubles the lock-in
16	Arm Holdings	ARM	49	Active erosion	RISC-V penetrating market by market (IoT→auto→server)	Read	An invisible semiconductor tax, but RISC-V is eroding it market by market
17	NVIDIA	NVDA	48	Stable	CUDA deepening vs custom silicon threat, two forces offsetting	Read	CUDA ecosystem deepening short-term, but custom silicon is a long-term threat
18	ICE	ICE	47	Stable	Exchange network effects solid	Soon	Liquidity network effects + NYSE brand, but leverage + cyclicality drag compounding
19	P&G	PG	47	Structural erosion	Private label penetration structurally rising	Read	69 consecutive years of dividend increases, but private label penetration keeps rising
20	Eaton	ETN	46	Structural widening	Electrification + DC power = decade-long structural demand	Read	Picks-and-shovels play for electrification — data center power demand is exploding
21	TSMC	TSM	45	Stable	Tech lead widening vs geopolitical risk unchanged, offsetting	Read	Tech lead widening, but geopolitical risk persists — two forces offsetting
22	Broadcom	AVGO	44	Stable	AI ASIC growth vs M&A integration risk	Soon	King of acquisitions, but stock-based comp is quietly diluting shareholders
23	Lam Research	LRCX	43	Structural erosion	Etch share slowly eroding (TEL/AMAT encroaching)	Read	One of the etch big three — market share slowly slipping, a boiling frog
24	Arista	ANET	42	Structural widening	AI backend networking = new category structural demand	Read	AI backend networking demand deepening moat, but extreme customer concentration
25	CoStar	CSGP	41	Stable	CRE data monopoly solid	Soon	CRE data monopoly at 47% OPM, but the Homes.com bet is consuming everything
26	Applied Materials	AMAT	41	Stable	Portfolio breadth stable but no pricing power improvement	Read	Widest equipment portfolio, but breadth doesn't equal pricing power
27	Palantir	PLTR	39	Execution gain	AIP expanding Ontology customer coverage	Read	Ontology lock-in deepening via AIP, but SBC and valuation are two deep moats to cross
28	Domino's	DPZ	36	Stable	Delivery network density unchanged	Read	Largest pizza delivery network — value positioning limits pricing power
29	Chipotle	CMG	35	Stable	Operational efficiency stable but no lock-in	Read	Fastest burrito assembly line, but zero customer lock-in
30	Starbucks	SBUX	33	Active erosion	Luckin in China + OPM collapse + brand premium damaged	Read	Luckin competition in China + OPM collapsing to single digits + brand premium eroding
31	Vertiv	VRT	30	Execution gain	NVIDIA partnership deepening liquid cooling first-mover edge	Read	NVIDIA partnership deepening liquid cooling first-mover edge, but each platform gen reshuffles
32	Rollins	ROL	30	Stable	Route density economics unchanged	Soon	Pest control density economics — but eleven years of zero profit growth
33	Fastenal	FAST	25	Stable	Channel lock-in stable but no pricing power	Soon	Quality without flair — locks in the channel, not the price
34	Marriott	MAR	21	Stable	Brand portfolio stable	Read	Most hotel brands, but overshadowed by Hilton's growth velocity
35	Hilton	HLT	21	Execution gain	Highest NUG in industry + Honors ecosystem expanding	Read	Highest NUG in hospitality, but one point of NUG decline changes valuation 7x
36	Royal Caribbean	RCL	16	Execution gain	Private destination expansion + record OPM	Read	Private destination expansion + record OPM, but built on top of the cycle
37	Intel	INTC	14	Full collapse	CPU/GPU/foundry share declining across multiple lines	Read	CHIPS Act as a bankruptcy backstop, but losing share across multiple markets simultaneously
38	IHG	IHG	11	Stable	Franchise model solid but cycle-sensitive	Soon	True margins hidden by reporting structure — cyclicality is the Achilles' heel
39	Super Micro	SMCI	8	Active erosion	Gross margin declining from 18% to 6%	Read	Gross margin declining from 18% to 6% — assembler fate caps the profit ceiling

Key Findings

Three of the top four are institutionally embedded — CPRT (quasi-regulated insurance salvage), SPGI and FICO (regulators mandate their products). Even if the product isn't the best, regulation and industry convention force adoption. Competitors aren't beaten by technology — they're excluded by the system.

Methodology

The Compounding Quality Index (CQI) evaluates long-term compounding quality across 6 dimensions, scoring up to 100 with 42 quantitative sub-factors over an 11-year data window (2014-2025).

Dimension	Assessment	Core Question
Pricing Power	Can it raise prices above inflation without losing customers?	How many customers leave if prices rise 10%?
Customer Stickiness	Depth of customer lock-in x revenue recurrence	How much time and money does it cost to switch?
Moat	Institutional embedding + network effects + ecosystem lock-in	How many years would a competitor need to catch up?
Growth Runway	Revenue engine clarity x remaining TAM	How many times can revenue multiply in 10 years?
Capital Discipline	Margin elasticity + capital allocation efficiency	Is the cash being deployed wisely?
Competitive Barriers	Data flywheel + economies of scale + physical barriers	How much would it cost a new entrant to replicate?

Trend Legend

↑Structural wideningIndustry structure/physics irreversibly deepening moatManagement-independent

↗Execution gainCompany actively deepening moat via share/ecosystem/productExecution-dependent

→StableMoat is solid with no material change—

↘Structural erosionRegulation/substitutes/competition structurally eroding moatHard to reverse

↓Active erosionSpecific competitors/substitutes actively breaching moatClear threat identified

⇊Full collapseMoat evaporating across multiple frontsMultiple factors compounding