Moody’s Corporation (MCO): A Bull Case Theory

 We came across a bullish thesis on Moody’s Corporation on Daniel’s Deep Dive’s Substack. In this article, we will summarize the bulls’ thesis on MCO. Moody’s Corporation’s share was trading at $487.24 as of December 1st. MCO’s trailing and forward P/E were 39.48 and 30.03, respectively according to Yahoo Finance.

Moody’s Corporation remains one of the dominant players in the global credit ratings and financial intelligence landscape, and despite rising concerns around artificial intelligence and new competitors, its position appears well protected by powerful structural and regulatory moats. The global ratings market is essentially an oligopoly shared by Moody’s, S&P Global, and Fitch, and this limited structure is not accidental.

Both regulators and institutional investors prefer a small, consistent group of trusted agencies to minimize rating shopping and ensure reliability across credit markets. Institutional investors, banks, and asset managers are bound by regulatory frameworks that require external ratings—often two—from approved agencies when providing financing. These rules embed Moody’s ratings deeply into capital allocation, collateral management, and risk models, making them a non-optional part of financial infrastructure.

Regulatory barriers further entrench Moody’s dominance. In the U.S., only firms registered and approved by the SEC can issue ratings used for regulatory purposes, a status that demands rigorous oversight, proven methodologies, and decades of performance credibility. The intentional difficulty of obtaining such approval effectively prevents new entrants from emerging.

Meanwhile, the perceived AI threat is overstated. Although AI can process and visualize data efficiently, it lacks access to the proprietary, verified databases Moody’s has built over decades—data that forms the foundation of its credit analysis and risk assessment systems. Furthermore, Moody’s platforms are deeply embedded in client workflows, creating substantial switching costs and operational dependencies. Together, these factors make Moody’s competitive position exceptionally durable and resilient to disruption.

Previously we covered a bullish thesis on Moody’s Corporation (MCO) by Business Model Mastery in February 2025, which highlighted the company’s strong recurring revenue base, dominant market share in credit ratings, and growing analytics division. The company’s stock price has depreciated approximately by 6.16% since our coverage. This is because valuation multiples compressed amid AI-related uncertainty. The thesis still stands as Moody’s long-term fundamentals remain intact. Daniel’s Deep Dive shares a similar view but emphasizes on Moody’s structural and regulatory moats protecting it from AI disruption.

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Disclosure: None.