6. Moody’s Corporation (NYSE:MCO)
Moody’s Corporation (NYSE:MCO) is among the best Warren Buffett stocks.
Buffett added Moody’s Corporation (NYSE:MCO) to his portfolio back in 2000, when the financial services company spun off from Dun & Bradstreet. As of Q4 2010, Warren Buffett held 28.42 million shares worth $754.14 million. Although reduced, the company’s stake in Moody’s remains significant. As of Q4 2025, Berkshire holds 24.67 million shares, which translates into a $12.60 billion stake.
Moody’s Corporation (NYSE:MCO) is widely held by hedge funds as well, with 91 out of 1,041 hedge funds remaining bullish on the stock. The combined hedge fund stake in the stock totals $25.54 billion as of Q4 2025.
The bullish case for Moody’s Corporation (NYSE:MCO) rests on regulatory privilege, embedded demand, and capital-light growth. As of April 20, 2026, over 80% of covering analysts keep bullish ratings on the stock, with the $535 consensus price target implying over 17% upside potential.
In its Q4 2025 investor letter, Ironvine Capital Partners argued that Moody’s and S&P function almost as near monopolies within global debt markets, as U.S. and European authorities depend on their ratings when buying bonds and measuring risk. As a result, issuers that choose not to obtain these ratings often face higher borrowing costs.
This dynamic puts Moody’s Corporation (NYSE:MCO) in a strong position to benefit from GDP-linked debt growth, which requires minimal capital. This leaves the company with room for share buybacks and dividend payments.
Meanwhile, Qualivian discussed in its Q4 2025 investor letter how the moat is translating into performance, with the third quarter of 2025 featuring adjusted EPS of $3.92, record revenue of $2.01 billion (+11%), and an adjusted operating margin of 53% (+500 basis points). The quarterly performance was driven by strong, higher-margin MIS issuance activity.
Additionally, Daniel’s Deep Dive bullish thesis noted that the company’s oligopolistic position, alongside S&P and Fitch, is reinforced by SEC approval barriers, institutional dependence on external ratings, proprietary verified data, and high switching costs, arguing that the risk of AI-driven disruption may be overstated.
Management’s Q4 2025 call further reinforced this, reporting record full-year 2025 revenue exceeding $7.7 billion, an adjusted margin of 51.1%, and adjusted EPS of $14.94. The company rated a record $6.6 trillion debt, delivered 60% growth in private-credit revenue, and achieved 97% recurring analytics revenue in the fourth quarter, along with 97% retention among GenAI customers.
At the same time, Moody’s Corporation (NYSE:MCO)’s management also outlined plans to return at least 90% of 2026 free cash flow to shareholders, reflecting their confidence in the company’s growth outlook.
Moody’s Corporation (NYSE:MCO) is a global provider of credit ratings, research, and risk analysis, helping investors and businesses make informed financial decisions.
While we acknowledge the potential of MCO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MCO and that has 100x upside potential, check out our report about the cheapest AI stock.
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