Dassault Systemes SE DSY

Dassault Systemes' Wide Moat Would Be Challenging for New Entrants to Replicate

Dassault Systèmes has a hold on the computer-assisted design software market for autos, aerospace and defense, and manufacturing. With 90% of all aircraft and 80% of all autos globally made via Dassault software, we believe the company will stay well entrenched with engineering teams with help from its significant switching costs and network effect found in its midmarket CAD software, SolidWorks. In our view, the wide-moat company has adapted well to new trends in its market exposures, such as electric vehicle design software, which has made us more confident in the longevity of its moat and ability to achieve excess returns on invested capital.