An updated edition of the July 31, 2025 article.

The concept of a wide moat refers to companies that possess strong, lasting competitive advantages, which insulate them from competition and enable them to sustain long-term profitability. The term, popularized by Warren Buffett, likens a company’s market position to a medieval castle surrounded by a wide moat — difficult for rivals to cross and attack.

Among the companies recognized for their wide moats, some are Microsoft Corporation (MSFT Quick QuoteMSFT - Free Report) , Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) , S&P Global Inc. (SPGI Quick QuoteSPGI - Free Report) and NIKE, Inc. (NKE Quick QuoteNKE - Free Report) . Each of these companies operates in industries with significant barriers to entry and enjoys advantages that make it difficult for competitors to challenge their positions.

Companies with wide economic moats benefit from factors such as brand strength, cost advantages, network effects, regulatory barriers and economies of scale. These characteristics make it challenging for new entrants or existing competitors to erode their market share. Businesses with wide moats often enjoy strong pricing power, consistent profit margins and the ability to reinvest in their operations, further strengthening their competitive edge.

The case for investing in wide-moat businesses is rooted in their ability to deliver steady, long-term returns. In contrast to companies operating in fiercely competitive industries, where profits can be highly volatile due to pricing pressures and rivalry, wide-moat businesses tend to show greater resilience during economic downturns and market turbulence. Their solid market positions and robust balance sheets enable them to endure challenges that might seriously impact less competitive firms.

Investing in wide-moat companies can be an effective strategy for building long-term wealth, as these businesses typically produce steady cash flows, navigate market volatility with resilience, and deliver value to shareholders through dividends 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 Keep an Eye on

Microsoft enjoys a dominant position due to its ecosystem of software, cloud services and enterprise solutions. Its products have become essential for businesses and consumers, creating high switching costs that discourage customers from moving to competitors. Microsoft capitalizes on artificial intelligence (AI) business momentum and Copilot adoption, alongside accelerating Azure cloud infrastructure expansion. 

The company delivered an exceptional fiscal 2025 performance, underscoring its successful AI transformation strategy. The AI business alone surpassed a $13 billion annual revenue run rate, growing an astounding 175% year over year, while Microsoft Cloud revenues exceeded $168 billion with 23% growth. Azure and other cloud services achieved a remarkable $75 billion in annual revenues with 34% growth. 

Microsoft's customer base reached unprecedented scale in fiscal 2025, with commercial bookings exceeding $100 billion for the first time. The company demonstrated exceptional enterprise penetration with healthy renewals and significant expansion in large contracts, including an increased number of 10-million and 100-million-dollar-plus deals for both Azure and Microsoft 365 platforms. Microsoft's gaming strategy transformation delivered impressive results in fiscal 2025, with Xbox Game Pass achieving nearly $5 billion in annual revenues for the first time, setting quarterly revenue records throughout the year.

Microsoft's financial strength is also exemplified by outstanding cash flow generation in fiscal 2025. Its balance sheet strength provides unmatched competitive advantages for AI infrastructure investment to meet soaring AI demand. Strong gross margin expansion with operating margins remaining stable despite significant infrastructure investments demonstrates Microsoft's pricing power and operational efficiency. The combination of substantial cash reserves, strong credit profile, and proven ability to generate consistent operating cash flows positions MSFT uniquely among technology companies to capitalize on the multi-trillion-dollar AI opportunity while maintaining financial stability and continuing robust shareholder returns throughout this transformational investment cycle. Microsoft currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Johnson & Johnson enjoys a wide moat in healthcare due to its diversified portfolio, trusted brand, and extensive research and development capabilities. Regulatory barriers in the pharmaceutical sector further protect its position.

JNJ’s biggest strength is its diversified business model, which helps it to withstand economic cycles more effectively. It has more than 275 subsidiaries, indicating that the business is extremely well-diversified. This diversification helps withstand economic cycles more effectively. In 2023, JNJ separated its Consumer Health business into a newly listed company called Kenvue (KVUE Quick QuoteKVUE - Free Report) . The separation of Kenvue allowed Johnson & Johnson to focus on its core pharmaceutical and medical device business.

JNJ has 26 platforms with annual sales exceeding $1 billion. Its diversified business is allowing it to post top-line growth in 2025, despite the loss of exclusivity for a blockbuster drug like Stelara. Meanwhile, it has one of the largest R&D budgets among pharma companies.

The company’s Innovative Medicine unit is showing a growth trend. JNJ expects continued growth in the second half of 2025 to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey and new indications for Tremfya and Rybrevant. JNJ expects to generate more than $57 billion in sales in the Innovative Medicines segment in 2025. It expects the Innovative Medicine business to grow 5-7% from 2025 to 2030. Johnson & Johnson, a Zacks Rank #2 stock, believes 10 of its new Innovative Medicine products have the potential to deliver peak sales of $5 billion. 

S&P Global, a leader in financial information and credit ratings, benefits from an economic moat driven by its brand strength, regulatory influence and data-driven services. Its credit rating business is essential for businesses, governments and investors, as its ratings are widely recognized and are often required to issue bonds. 

The company’s proprietary financial data, benchmarks and analytics services provide indispensable tools for market participants, ensuring customer reliance on its offerings. Due to the trust and credibility S&P Global has built over decades, new competitors struggle to enter the space, giving the company pricing power and a stable revenue stream from subscription-based services.

This Zacks Rank #2 company is benefiting from the growing demand for business information services. The constantly increasing volume of data from private and government organizations has augmented the demand for improved enterprise-wide financial performance visibility. Higher demand for news, information and analytics solutions will drive the growth of the market. 

Further, the industry is benefiting from the rising demand for risk mitigation. Changes in market dynamics are more or less a constant phenomenon, keeping companies exposed to credit fund and operational risks. Accurate market and financial information is required for risk mitigation, and this would spur demand for business information services.

NIKE is the global leader in athletic footwear, apparel, equipment and sports-related accessories, with operations in over 160 countries. Its scale, premium positioning and cultural dominance remain unmatched. NIKE’s “swoosh” logo and “just do it” tagline are widely recognized across the world, while its association with celebrity sportspersons as well as top professional and college teams, ensures a strong brand recall in the key U.S., U.K., Japanese and Chinese markets. Despite revenue challenges in fiscal 2025, the company maintains dominance in footwear.

NIKE’s leadership across running, basketball, training and global football underscores NKE’s unmatched scale, while powerful athlete partnerships and cultural relevance reinforce its brand equity and allow it to capture consumer loyalty worldwide. Backed by a robust balance sheet, global scale and innovation-led growth pipeline, NKE remains well-positioned for sustainable expansion.

NIKE, a Zacks Rank #3 (Hold) stock, is executing its “Win Now” strategy, rebalancing its portfolio by streamlining legacy franchises such as Air Force 1, Dunk and AJ1, while fueling growth in performance-led categories and women’s sportswear. NKE’s “Win Now” strategy is essentially a fast-track operational reset designed to restore brand momentum and position the business for sustainable growth after a period of underperformance. 

The company is shifting to a “sport offense” model, replacing category splits with cross-functional, sport-specific teams for NIKE, Jordan and Converse. This structure deepens athlete relationships, fuels sport-specific innovation, and creates more authentic storytelling. At the same time, NIKE is enhancing its integrated marketplace by strengthening NIKE Direct, elevating digital as a premium channel, and expanding through strategic partnerships with Amazon (AMZN Quick QuoteAMZN - Free Report) and Urban Outfitters (URBN Quick QuoteURBN - Free Report) .