Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We spent a good deal of time with NXP's second-quarter 10-Q (quarter ended June 28, 2026), the last several years of filings, and the current market picture. Here is where we come out: NXP is a good business — a well-run, number-two player in automotive semiconductors with genuine switching costs — but it is not a wonderful business by our definition. It must spend roughly 18 cents of every revenue dollar on research and development simply to hold its competitive position, it sells into brutal customers (auto OEMs) who negotiate price down every year as a matter of religion, its demand is deeply cyclical, and its largest growth market — China — is actively building domestic competitors with state backing. The moat is real but narrow, and we cannot say with confidence what this company's competitive position looks like in fifteen years.
Recent filings analysed: 10-Q (2026-07-28), 8-K (2026-07-28), 8-K (2026-06-11), 10-Q (2026-04-28).
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