What exactly are "intangible assets"?

Intangible assets are non-physical resources that provide value to a company. They include things like patents, trademarks, copyrights, brand recognition, proprietary software code, and customer relationships. Unlike physical assets (buildings, equipment, inventory), you can't touch intangible assets, but they often represent the most valuable part of modern businesses.

Why do companies with intangible assets often have higher profit margins?

Companies focused on intangible assets typically enjoy higher profit margins because they can scale their businesses without proportionally increasing costs. For example, software companies can sell millions of copies of their programs without manufacturing physical products. Once they've created their intellectual property, the cost of serving additional customers is often minimal compared to traditional businesses.

How does artificial intelligence relate to these companies?

AI is acting as a major growth catalyst for these companies in two main ways. First, many of these businesses own valuable data and algorithms that become more powerful when enhanced with AI capabilities. Second, AI tools can help these companies develop new intangible assets more efficiently, such as creating content, developing software, or analyzing market trends to strengthen their brand strategies.

What are competitive moats and why do they matter?

A competitive moat refers to advantages that protect a company from competition, similar to how a castle moat provides defense. Intangible assets create powerful moats because they're often legally protected (patents/copyrights) or extremely difficult to replicate (brand loyalty/proprietary technology). These protections allow companies to maintain premium pricing and market leadership, potentially leading to stronger long-term investment returns.

What does "projected sales" and "projected profit" mean in the stock information?

"Projected sales" refers to analysts' forecasts of a company's future revenue (the total money it expects to bring in from selling products or services). "Projected profit" represents the anticipated earnings after subtracting expenses from that revenue. These forward-looking metrics help investors understand a company's growth trajectory and potential future financial performance.

15 handpicked stocks

Intangible Asset Giants

Explore companies whose true value lies in their ideas, brands, and code—not physical products. These carefully selected stocks represent businesses with highly defensible, scalable advantages built on intellectual capital and digital innovation.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 17