3 Stocks Whose Competitive Walls Tower Over Nvidia's

Key Points

• Tech giant Nvidia has remained ahead of rivals thanks to its competitive advantage.
• These healthcare companies have proven expertise in their fields -- and they would be difficult to unseat.
• 10 stocks we like better than Moderna ›

Nvidia has become a stock market darling for two big reasons. First, the tech giant operates in one of the biggest growth markets around, the artificial intelligence (AI) chip market. And second, Nvidia has secured strong leadership in this market thanks to its early entry and its commitment to innovation. This has created a solid moat, or competitive advantage, that is resulting in lasting demand for Nvidia's products and, therefore, revenue growth investors can count on quarter after quarter.

But Nvidia isn't the only company with a rock-solid moat. In fact, the following three healthcare stocks have competitive walls that tower over those of the AI giant. Let's check them out.

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1. Moderna

Moderna (NASDAQ: MRNA) is known for its blockbuster coronavirus vaccine, a product that brought in $18 billion in peak annual sales in 2022. But that may have been just the beginning for this biotech company, thanks to its expertise in messenger RNA technology.

Moderna uses its mRNA method across its pipeline to address other respiratory viruses, rare diseases, and oncology. The technology involves putting mRNA to work to teach the body to make specific proteins that will protect against or fight disease. So mRNA may be used in vaccines to prevent illness, like the coronavirus vaccine, as well as in vaccines to fight an already present illness, such as cancer. The company recently announced impressive phase 3 results for its melanoma candidate.

Though Moderna brought its coronavirus vaccine to market in a short period of time, the company had been working on mRNA technology for years, developing a keen expertise. This strength, along with the company's late-stage pipeline, makes it a high-moat stock that could deliver big over the long term.

2. Intuitive Surgical

Intuitive Surgical (NASDAQ: ISRG), selling the flagship Da Vinci system, is the market leader worldwide in robotic surgery. It's such a major player that Medtronic, when launching rival system, Hugo, last year, positioned Hugo as "another choice" for surgeons -- but didn't present it as a solution meant to replace the Da Vinci.

Surgeons generally train on the Da Vinci, and hospitals have invested millions of dollars in these platforms. As a result, they're unlikely to shift to another system. These two simple facts mean it would be difficult for another company to unseat Intuitive Surgical. And that offers investors significant visibility on revenue to come.

On top of this, Intuitive, like Nvidia, has a strong focus on innovation. The company recently released the Da Vinci 5, a product with more than 150 design innovations that result in improved surgeon autonomy and better operating room workflow, among other benefits. All of this should ensure Intuitive Surgical's growth well into the future.

3. Vertex Pharmaceuticals

Vertex Pharmaceuticals (NASDAQ: VRTX) has expanded into various treatment areas in recent years, throughout its pipeline and commercially. For example, it's launched a gene editing treatment for blood disorders and a drug for pain management. And in the pipeline, it's advancing candidates for rare diseases as well as potential drugs for more common diseases such as type 1 diabetes.

But one particular thing constructs a solid moat for Vertex, and that's its long history of expertise in the treatment of cystic fibrosis (CF). The company makes CFTR modulators, a type of drug designed to correct the faulty functioning of a protein made by the CFTR gene. Vertex is the global leader in CF treatment, and this has resulted in a billion-dollar business for the company. This expertise has helped the company grow its annual revenue to $12 billion.

Vertex's research strengths here are likely to result in tomorrow's next CF blockbuster. Meanwhile, the company's solid patent portfolio has ensured its market leadership through at least the late 2030s.

All of this means that Vertex has an extremely significant competitive wall -- one that even towers over that of tech giant Nvidia.

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Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Intuitive Surgical, Medtronic, Moderna, Nvidia, and Vertex Pharmaceuticals. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.