Methodology
Select companies with significant pre-AI moats. AI serves as an “enhancer” rather than core driver. These 20 stocks had strong competitive moats before ChatGPT existed.
Undervalued (10 stocks)
| Ticker | Company | Price | Fwd PE | Div Yield | ROE | Moat Type | AI Enhancement |
|---|
| ADBE | Adobe | $240 | 9.1x | — | 59% | Switching costs/brand | Firefly generative AI tripling revenue |
| INTU | Intuit | $304 | 11.2x | 1.58% | 23% | Switching costs/data | Intuit Assist automates tax/accounting |
| CRM | Salesforce | $179 | 12.0x | 0.98% | 12% | Switching costs/network effects | Einstein GPT upgrades CRM |
| ELV | Elevance | $388 | 13.3x | 1.77% | 12% | Regulatory/scale/data | AI claims automation |
| ABT | Abbott Labs | $87 | 14.3x | 2.91% | 12% | Brand/R&D/regulatory | AI diagnostic tools |
| TMO | Thermo Fisher | $448 | 16.4x | 0.42% | 14% | Scale/switching costs | AI accelerates drug discovery |
| ICE | ICE | $151 | 17.2x | 1.38% | 14% | Regulatory/network effects | AI market surveillance |
| SPGI | S&P Global | $412 | 18.6x | 0.94% | 14% | Regulatory standards/data | AI credit analysis |
| MSFT | Microsoft | $416 | 21.5x | 0.87% | 34% | Switching costs/ecosystem | Copilot embedded across products |
| HD | Home Depot | $311 | 19.3x | 3.00% | 128% | Brand/scale/Pro lock-in | AI inventory management |
Fair Value (5 stocks)
| Ticker | Company | Price | Fwd PE | Moat Type |
|---|
| V | Visa | $326 | 22.0x | Network effects/regulatory |
| MA | Mastercard | $493 | 21.7x | Network effects/tech infrastructure |
| UNH | UnitedHealth | $377 | 18.1x | Scale/Optum integration/data |
| CME | CME Group | $283 | 21.9x | Regulatory/network effects |
| ISRG | Intuitive Surgical | $437 | 37.0x | Regulatory/FDA/switching costs |
Overvalued (5 stocks)
| Ticker | Company | Price | Fwd PE | Issue |
|---|
| NOW | ServiceNow | $100 | 19.9x | Growth deceleration |
| SNOW | Snowflake | $178 | 73.3x | Not yet profitable |
| PLTR | Palantir | $137 | 65.9x | Extreme valuation |
| DDOG | Datadog | $224 | 78.6x | High valuation |
| COST | Costco | $1,003 | 44.5x | 44x PE for retail |
Key Takeaways
- Pre-AI moats are real moats — AI is icing on the cake, not the cake itself
- Biggest divergence is valuation — ADBE at 9x PE vs PLTR at 66x PE
- Best opportunity: traditional moat companies ignored by AI narrative
- Best AI + moat combo: MSFT + V/MA + SPGI/TMO