Moody's Corp (MCO) has been named the featured stock in CNBC Pro's 'Best Stocks in the Market' column, with contributors Josh Brown and Sean Russo highlighting its long-time ownership by Berkshire Hathaway and the growing importance of its proprietary data in an AI-driven world.
The column, published Thursday, notes that Berkshire Hathaway has held Moody's since 2000 and its latest 13F filing shows about 24.7 million shares, worth roughly $11 billion. The authors describe Moody's as having 'flinched' during this year's AI-related sell-off, falling more than 19% by mid-February to a 52-week low of $402, but argue its underlying data is essential in a world dominated by AI, with most of it not scrapeable from public sources.
Moody's operates two businesses: Moody's Investors Service, the credit ratings agency, which generated $1.09 billion in third-quarter revenue on roughly $1.7 trillion of rated debt issuance, and Moody's Analytics, which sells credit risk, insurance catastrophe models and compliance data to banks and insurers. Analytics has 99% recurring revenue and $3.7 billion in annual recurring revenue.
CEO Rob Fauber said on the company's third-quarter earnings call that 'AI is amplifying the value of the trusted data insights.' The column reports that customers are plugging Moody's research directly into their own AI platforms, with Model Context Protocol (MCP) users more than quadrupling in three months and usage up more than tenfold.
The authors caution that Moody's chart shows a stock that has gone sideways all year and has not reclaimed its highs, unlike data peer MSCI. 'MSCI is a trend you'd be joining, while Moody's is a setup you'd be anticipating, and setups can fail,' they wrote. The stock is pressing the top of a range near $515, and the January high of $547 is the level to clear. A close above that would signal a breakout. The authors suggest traders use $475 as a stop and investors anchor to $455, the earnings-day low.
Moody's reported third-quarter results on Oct. 21, with revenue of $2.02 billion and adjusted EPS of $4.14, both below consensus, as rated issuance fell 2% and high-yield and leveraged loans pulled back. Positives included investment-grade issuance up 16% and AI-related issuance running at about four times last year. First-time rating mandates rose 40%, the highest quarterly total in five years, and Analytics ARR grew 8%. Management maintained full-year adjusted EPS guidance of $16.50 to $17. The next earnings report is expected in mid-February 2027.
Analysis
Why This Matters
- For investors, the pick underscores a growing thesis that proprietary, non-scrapable data will become a critical resource as AI adoption accelerates, potentially boosting valuations for data incumbents like Moody's.
- Berkshire Hathaway's decades-long, unchanged holding signals a vote of confidence from one of the world's most followed investors, even during a sharp drawdown.
- The technical setup described by the column offers a clear risk-management framework that could be instructive for traders watching similar recovery stories in data and analytics stocks.
Background
Moody's is a diversified financial services company best known for its credit ratings, but its Analytics division provides risk data, models and compliance tools to financial institutions. The stock was caught in a broad AI-driven sell-off earlier this year after Anthropic's legal plug-in triggered a rout across software and information services. While MSCI, another data and index provider, has since recovered to all-time highs, Moody's has traded in a wide range between roughly $402 and $547.
What to Watch
- Whether Moody's stock closes and sustains above $547, the January 2026 high, which the column identifies as the breakout level.
- A weekly close below $455, the October 21 earnings-day low, would signal the recovery attempt has failed.
- The next earnings report, expected in mid-February 2027, and any further commentary on AI-related data demand from CEO Rob Fauber.
Checked
12 claims in this story checked against 1 source: 9 supported.
Show each claim
- Partly supportedCNBC Pro contributors identify Moody’s as a “Top Stock Pick.”US Top News and Analysis: “On Thursdays we use this column to highlight a single name. Today it's Moody's (MCO)”
- Not in the sourcesThe column was published Thursday.US Top News and Analysis: “On Thursdays we use this column to highlight a single name.”
- SupportedBrown and Russo describe Moody’s as a core Berkshire Hathaway holding.US Top News and Analysis: “This Josh Brown 'best stock' has been a core holding of Berkshire Hathaway for two decades.”
- SupportedMoody’s proprietary data is essential in a world dominated by AI, and most of it cannot be scraped from public sources.US Top News and Analysis: “The underlying data is what makes Moody's essential for a world dominated by AI. The LLM models are only as good as what they can pull from, and most of Moody's data can't be scraped from public sources.”
- SupportedBerkshire has owned Moody’s since 2000, and its latest 13F shows about 24.7 million shares worth roughly $11 billion.US Top News and Analysis: “Berkshire Hathaway has owned Moody's since 2000, and its latest 13F (for the quarter ended June 30) shows about 24.7 million shares, worth roughly $11 billion”
- Partly supportedMoody’s fell more than 19% by mid-February and reached a 52-week low of $402.US Top News and Analysis: “By February 18, Moody's was down more than 19% for the year, and it eventually hit a 52-week low of $402.”
- SupportedCEO Rob Fauber said, “AI is amplifying the value of the trusted data insights.”US Top News and Analysis: “He also said "AI is amplifying the value of the trusted data insights."”
- SupportedCustomers are plugging Moody’s research into their AI platforms; MCP users more than quadrupled in three months and usage rose more than tenfold.US Top News and Analysis: “CEO Rob Fauber said on the Q3 call that customers are plugging Moody's research directly into their own AI platforms. MCP users (Model Context Protocol — this is how AI gets its data from approved sources) have more than quadrupled in three months and usage is up more than tenfold .”
- SupportedThe authors wrote, “MSCI is a trend you'd be joining, while Moody's is a setup you'd be anticipating, and setups can fail.”US Top News and Analysis: “MSCI is a trend you'd be joining, while Moody's is a setup you'd be anticipating, and setups can fail.”
- SupportedMoody’s was pressing the top of its range near $515, with $547 as the level to clear; a close above it would be a breakout.US Top News and Analysis: “The stock is now $515... The $547 January high is the level to clear. A close above it is the breakout.”
- SupportedMoody’s reported third-quarter revenue of $2.02 billion and adjusted EPS of $4.14, both below consensus.US Top News and Analysis: “Moody's reported Q3 earnings on Oct. 21. Revenue rose 1% to $2.02 billion and adjusted EPS rose 6% to $4.14, both short of consensus”
- SupportedMoody’s next earnings report is expected in mid-February 2027.US Top News and Analysis: “The next earnings report will be in 2027, landing in mid February.”