The Morning Filter Investing Insights: These Top Tech Stocks Can Stand Up to AI Risks
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Mar 20, 2026 Eric Compton, Director of Equity Research for Technology at Morningstar, explains which tech sectors can weather AI-driven sell-offs. He discusses moat reassessments across 132 firms. Cybersecurity, design software, and financial-data firms emerge as resilient areas. The conversation highlights where to look for durable advantages and potential value after AI panic.
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What Moats Really Mean For Valuation
- Moats signal long-term excess returns versus a firm's cost of capital.
- Morningstar defines no, narrow, and wide moats by confidence in sustained excess returns out to 10–20 years with ROIC versus WACC as the measure.
132 Company Review Led To 40 Downgrades
- Morningstar screened 132 companies thought most at risk from AI and ran an expedited moat committee review.
- The team downgraded 40 companies, more than Eric Compton initially expected, after heated internal debate and re-pitches by analysts.
App Layer Versus Infrastructure Vulnerability
- AI pressure varies between app-layer and infrastructure-layer businesses, with app-layer UX more replicable.
- Cybersecurity sits in infrastructure and thus remains essential whether traffic comes from humans or AI agents.