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 

The market is wrong to reprice Moody's and S&P Global just because yields are rising. Per @moats_multiples' notes from a TCI call, Chris Hohn is very confident about ratings-agency growth, with investment-grade ratings supported by the AI buildout and sub-investment-grade by huge maturity walls. TCI's large positions in both fit that view. x.com 

Moody's and S&P Global could de-rate from high starting multiples if generalist portfolio managers come to see them as FICO 2.0. Their industry structures differ, but parallels in standards, pricing power and regulatory exposure could build a narrative that their pricing power is tapped out after the FICO case study, compressing multiples further. So far their de-rating has come from macro and AI pressure, not such fears. 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

S&P Global's July 1 spin-off of Mobility Global refocuses it on its high-margin ratings and indices businesses, removing a conglomerate discount. Its ratings duopoly with Moody's and S&P 500 licensing fees collect tolls on capital markets as passive assets grow and AI and energy buildouts drive a debt issuance boom. Per JPMorgan and other banks, LLMs need proprietary data like its Market Intelligence and Platts benchmarks, reversing AI fears. Q1 operating margin rose 100 bps to 51.8%. x.com 

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 

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 

S&P Global collects a toll on new bonds and money flowing into index funds. It is a five-year buy at today's valuation despite a roughly 16% year-to-date share decline amid AI fears: last quarter ratings revenue grew 17%, index revenue 20%, and EPS 23%. Free cash flow per share has compounded 14.5% annually since late 2016. x.com 

The Fed's September 16 quarter-point hike affects the high-moat portfolio differently from the simple picture of borrowers paying more. Bond-rating companies are having record quarters because the AI building boom keeps borrowing whatever rates do, while brokers that should win get only a small bump. The real damage falls on home loans and on the price investors will pay today for profits far in the future, which is where most of the portfolio sits. x.com 

S&P Global looks like an obvious buy-and-forget stock because rating agencies aren't going anywhere no matter how good AI gets, even though the chart looks poor. x.com