Stocks AI Will Destroy vs Stocks AI Will Make Stronger
Wall Street loves the phrase "economic moat." A wide moat means a company can fend off competitors and protect its profits for years. Warren Buffett built his fortune on it.
But here's what most investors haven't figured out yet: in the age of AI, some moats are turning into liabilities.
Not all competitive advantages are created equal. Some companies with decades-old moats are sitting ducks for AI disruption. Others, including some boring names you'd never associate with artificial intelligence, are actually getting stronger because of it.
The difference comes down to one question. Is your moat made of atoms or bits?
The Framework: Physical Moats vs. Information Moats
Before sorting winners from losers, you need to understand why AI disrupts unevenly.
AI is exceptionally good at one thing: commoditizing information. If a company's competitive advantage is built on knowing things other people don't, organizing data better than competitors, or providing expertise that can be codified, AI is coming for that advantage. Fast.
But AI can't build a semiconductor fab. It can't replicate a network of data centers. It can't get FDA approval for a new drug. It can't lay fiber optic cable.
That's the split.
Physical and regulatory moats (infrastructure, manufacturing capacity, patents, government approvals) tend to get stronger in an AI world. AI increases demand for physical assets while being unable to replicate them.
Information and service moats (expertise, data advantages, brand loyalty in service businesses, human-powered workflows) tend to erode. AI replicates the value these companies provide at a fraction of the cost.
Moatifi's free stock screener scores every stock on two dimensions: traditional moat strength (1 to 10) and AI durability (1 to 10). The gap between those two scores tells you everything. A company with a moat score of 7 but an AI durability score of 2 is a ticking time bomb. A company where both scores are 9? That's a fortress.
Let's look at real examples.
Stocks AI Will Make Stronger
These companies don't just survive the AI revolution. They profit from it. Every dollar spent on AI flows through their businesses in some way.
NVIDIA (NVDA): Moat 9, AI Durability 10
This one is obvious, so let's get it out of the way. NVIDIA makes the GPUs that power virtually every AI model on the planet. Their CUDA software ecosystem creates massive switching costs. Developers have built entire careers around NVIDIA's platform.
The more AI advances, the more chips the world needs. NVIDIA's AI durability score is a perfect 10 because AI doesn't threaten their business. AI is their business. This is the purest picks-and-shovels play in the market.
AMD: Moat 7, AI Durability 9
NVIDIA gets all the headlines, but AMD is the credible second source every hyperscaler needs. No CTO wants to be 100% dependent on a single chip supplier. AMD's MI300 series gives cloud providers negotiating leverage against NVIDIA, which means AMD gets purchased almost by default.
The AI boom needs more silicon than any single company can produce. AMD benefits from overflow demand and the basic procurement reality that large buyers always want a second vendor.
ASML: AI Durability 9
Here's where it gets interesting. ASML doesn't build AI models. Most retail investors couldn't tell you what the company does. But ASML makes the extreme ultraviolet lithography machines that manufacture advanced chips. Without ASML's machines, there are no AI chips. Period.
There are exactly zero competitors who can build what ASML builds. The machines cost $380 million each. The waiting list stretches years. AI demand means more fabs, which means more ASML machines. Their moat is physics and engineering, not information. AI can't touch it.
Datadog (DDOG): Moat 8, AI Durability 9
Every AI application runs on cloud infrastructure. That infrastructure needs monitoring. Datadog is the leading observability platform, and the AI boom is creating exponentially more infrastructure to watch.
Here's the kicker: AI workloads are harder to monitor than traditional applications. They're more complex, more resource-intensive, and more unpredictable. Companies deploying AI agents need even more observability, not less. Datadog also uses AI internally to improve its own product, creating a flywheel where AI makes the monitoring tool better at monitoring AI.
Thermo Fisher Scientific (TMO): Moat 9, AI Durability 9
AI is revolutionizing drug discovery. Models can now predict protein structures and identify drug candidates in hours instead of years. But here's what the AI hype cycle misses: those AI-discovered drugs still need to be physically tested, manufactured, and validated.
Thermo Fisher provides the lab equipment, reagents, and services that make physical science happen. AI drug discovery doesn't replace their products. It increases demand for them. More drug candidates entering the pipeline means more lab equipment sold. Their moat is physical and regulatory. AI accelerates their customers' work, which accelerates Thermo Fisher's revenue.
Digital Realty (DLR): Moat 9, AI Durability 9
AI models don't run in the cloud. They run in data centers that happen to be connected to the cloud. Digital Realty owns and operates over 300 data centers across 50+ metros globally.
Building a new data center takes years of permitting, construction, and power infrastructure buildout. AI training clusters need massive, contiguous power and cooling capacity. You can't replicate that with software. Digital Realty's physical assets become more valuable with every new AI model that needs a home. Their vacancy rates are near historic lows, and lease rates keep climbing.
Salesforce (CRM): Moat 9, AI Durability 9
This one surprises people. Isn't Salesforce a software company? Couldn't AI disrupt CRM?
Not likely. Salesforce has something AI agents desperately need: customer data. Every company deploying AI sales agents, AI customer service bots, or AI marketing tools needs that AI to plug into their CRM system. Salesforce is where the data lives for hundreds of thousands of businesses.
Their Einstein AI platform turns Salesforce from a database into an AI-powered revenue engine. Instead of AI replacing CRM, AI makes CRM more valuable. The switching costs were already enormous (migrating CRM data is a nightmare). Now add AI models trained on years of company-specific customer data, and those switching costs become almost insurmountable.
Stocks AI Will Destroy
These companies have real businesses and, in some cases, decades of profitability. But their competitive advantages are built on information, expertise, or intermediary positions that AI is rapidly commoditizing.
Robert Half (RHI): AI Durability 2
Staffing and recruiting companies are facing an existential threat. Robert Half's core business is matching temporary workers and professionals with companies that need them. That's fundamentally an information-matching problem.
AI agents are already handling initial candidate screening, resume parsing, and job matching. Companies like LinkedIn are building AI recruiting tools that do in seconds what a recruiter does in days. Worse, AI is also eliminating some of the temp jobs Robert Half fills. When an AI agent can handle basic accounting tasks or administrative work, you don't need a temp worker at all. The middleman loses from both sides.
Simon Property Group (SPG): AI Durability 3
Simon Property is the largest mall operator in America. Their moat was location and the irreplaceable experience of in-person shopping. That moat has been eroding for a decade thanks to e-commerce, but AI accelerates the decline dramatically.
AI shopping assistants can now provide personalized product recommendations, virtual try-ons, and instant price comparisons. AI-powered logistics make delivery faster and cheaper. The reasons to physically visit a mall keep shrinking. Simon Property's AI durability score of 3 reflects a business model that AI slowly hollows out rather than destroys overnight.
Warner Bros. Discovery (WBD): AI Durability 3
Content used to be king because content was expensive to create. A Hollywood studio's moat was its ability to spend hundreds of millions on production, attract top talent, and distribute globally.
AI is demolishing every part of that value chain. AI can generate scripts, storyboards, visual effects, music, and even entire short films. The cost of "good enough" content is plummeting toward zero. Warner Bros. Discovery faces a future where their back catalog is their main asset, but even that depreciates as AI-generated alternatives flood the market. When anyone can produce studio-quality content, the studio's moat disappears.
Walgreens Boots Alliance (WBA): AI Durability 3
Walgreens built its business on physical convenience. Need a prescription? Go to the corner pharmacy. Need health advice? Talk to the pharmacist.
AI is unbundling every piece of that. Telehealth platforms powered by AI can diagnose, prescribe, and ship medication to your door. AI health chatbots provide 24/7 guidance that's often more thorough than a rushed in-store pharmacist interaction. Automated pharmacy fulfillment centers can fill prescriptions faster and more accurately than humans. Walgreens is stuck with thousands of physical locations and the overhead that comes with them, while AI-native competitors operate with a fraction of the cost structure.
Medifast (MED): AI Durability 3
Medifast's OPTAVIA brand relies on personal health coaches who sell meal replacement products and provide weight loss guidance. It's a multi-level marketing model built on human relationships and personalized coaching.
Medifast faces a double disruption. First, AI health coaching apps can provide personalized nutrition and exercise guidance for free or near-free, eliminating the need for human coaches. Second, GLP-1 drugs like Ozempic and Mounjaro are changing weight loss entirely. When a weekly injection is more effective than any coaching program, the coaching business model collapses. AI plus pharma innovation is a one-two punch that Medifast may not survive.
POOL Corporation (POOL): AI Durability 3
POOL Corp is the largest wholesale distributor of swimming pool supplies and equipment in the world. Their moat is distribution: they sit between manufacturers and the thousands of small pool service companies that install and maintain pools.
That middleman position is exactly what AI procurement tools are designed to eliminate. AI-powered supply chain platforms can connect small businesses directly with manufacturers, optimize inventory, compare prices, and predict demand. POOL Corp's value proposition, being the knowledgeable intermediary who simplifies purchasing, gets replicated by software. Distribution moats built on information advantages are among the most vulnerable to AI disruption.
The Pattern You Should Be Looking For
Step back and look at both lists. The pattern is clear.
AI-strengthened companies share common traits: - Physical infrastructure that can't be replicated digitally (data centers, fabs, lab equipment) - Regulatory barriers that AI can't shortcut (FDA approvals, semiconductor IP, utility permits) - Products that AI increases demand for rather than replaces - Network effects that deepen with AI adoption (more AI users means more value)
AI-vulnerable companies share different traits: - Business models built on human expertise that can be codified - Intermediary positions in supply chains (matching buyers to sellers) - Services where "good enough" AI output threatens premium human delivery - Physical retail or location-based advantages in an increasingly digital world
The uncomfortable truth? A high traditional moat score doesn't protect you. Robert Half has been a profitable business for decades. Simon Property owns irreplaceable real estate. Walgreens has brand recognition that took a century to build. None of that matters if AI vaporizes the reason customers use your service.
How to Use This in Your Portfolio
You don't have to memorize which companies fall into which bucket. That's what screening tools are for.
Moatifi's free stock screener lets you filter stocks by both moat strength and AI durability. The "AI Durable" preset specifically surfaces companies that score high on both dimensions: strong traditional moats that AI makes even stronger.
Here's a simple framework for evaluating any stock in your portfolio:
- High moat, high AI durability (8+ on both): Core holdings. These companies compound advantages as AI grows.
- High moat, low AI durability (7+ moat, below 5 AI): Danger zone. The market may not have priced in the AI risk yet. These are the value traps of the next decade.
- Low moat, high AI durability: Speculative. They benefit from AI but lack traditional competitive protection.
- Low moat, low AI durability: Avoid. No moat and AI headwinds is the worst combination.
The most important quadrant is the second one. High moat, low AI durability. These are the stocks that look safe on traditional metrics but are quietly being undermined. They're the ones most likely to blindside investors who aren't paying attention to how AI reshapes competitive dynamics.
The Bottom Line
The AI revolution isn't just creating winners. It's exposing which competitive advantages were real and which were just information asymmetries waiting to be arbitraged away.
Your job as an investor is to figure out which side of that line your holdings sit on. A company's moat score tells you how strong its defenses are today. Its AI durability score tells you whether those defenses will still matter in five years.
Use Moatifi's free AI Durable preset to screen for stocks that get stronger, not weaker, as AI advances. The companies that thrive in an AI world aren't always the ones building AI. Sometimes they're the ones building the things AI can never replace.
Disclaimer: This article is for informational and educational purposes only. It is not financial advice, and it does not constitute a recommendation to buy, sell, or hold any security. Always do your own research and consult a qualified financial advisor before making investment decisions. Stock scores and ratings referenced in this article are algorithmic outputs and should not be the sole basis for any investment decision.