S&P Global's moat may be weaker than its ratings pricing power suggests, and its gross profit dollars are likely to come under pressure as AI does more of the work, even if margins rise. FICO and the credit bureaus once looked just as required and oligopolistic until Vantage, with regulatory help, built a better product and upended pricing. The market is skeptical of historical data resale, as with CoStar and Verisk; the index business looks durable. x.com 

FICO's moat is starting to get disrupted, and the premium multiple holders once defended has not held up. Two years ago the stock traded at 80x EPS on the argument that a high-quality compounder with a moat deserved it; that multiple has since compressed by about 80%. FICO would need to rise 280% to regain its all-time high, and there is a good chance it never does. x.com  x.com  x.com 

S&P Global and Moody's collect a toll on AI capex either way: if data-center returns are bond-like, the buildout gets funded with bonds, each needing a rating at issue and surveillance while outstanding. Low returns plus heavy capex keep the issuance calendar full while equity holders eat thin returns. New issuance may stay quiet given a 2028-weighted refinancing wall and wider spreads, but surveillance and index revenue bill off outstanding debt. Both traded well under 25x in past droughts. … Show more

FICO is being disrupted, though not dying, and its moat is more fragile than it looks. Most banks' own scoring models are equal to or better than FICO's and are used alongside it. FICO's real moat is the level playing field its score gives the institutional and resale mortgage markets, so it is truly over for FICO if Fannie Mae and Freddie Mac switch to VantageScore. x.com  x.com  x.com 

Fair Isaac still looks far too expensive at 90x free cash flow, even after a 75% fall in a monopoly. Even if FCF doubled, the price would equal 45 years of cash flow, and doubling at FICO's size is much less plausible after it raised prices 17 times and angered customers. The test is whether the company can earn the price paid within an investor's lifetime under generous growth assumptions. x.com  x.com  x.com  x.com 

S&P Global's ratings and indices could form an exceptionally profitable, wide-moat standalone business. Without its other units, their implied operating margin would be around 68%, among the market's top five; that makes further spinoffs sensible, though the separation is hypothetical. x.com  x.com 

FICO no longer merits ownership because its business model, once arguably the best in the world, has made too many enemies and may have gotten too greedy with pricing. x.com 

Fair Isaac's scoring moat is eroding after the FHFA said Fannie Mae and Freddie Mac will move to a unified mortgage pricing grid that places VantageScore alongside Classic FICO. VantageScore borrowers will reach the top pricing tier at 780+, the same threshold as FICO, eliminating their previous 20-point disadvantage. As @oguzerkan notes, even after a 60% drop this year the stock still trades at 19x earnings, a reminder never to overpay for quality. x.com  x.com  x.com  x.com 

Moody's is one of the world's most beautiful businesses because trusted ratings take decades to establish, protecting its duopoly with S&P and its pricing power. Operating margins exceed 45%, and Moody's Analytics subscriptions make revenue quite resilient when companies issue less debt. Decades of credit-risk data are a huge AI product opportunity; fast-growing private credit also needs ratings. x.com 

FICO's pricing power should hold because lenders have hated its pricing forever and none of them ever actually leave, which makes Steve Eisman's short a brave bet. Eisman says FICO raised prices over 500% and angered everyone in lending. Switching costs are the moat, and if they actually crack, the stock would fall fast rather than slowly. x.com  x.com