News of the Week (March 23-27, 2026)

17 min read

Table of Contents

I was able to meet with Axon's head of IR to chat through some questions about the company. I will share my review of that conversation after it is approved by the company. Hopefully early next week.

1. Updated Fast Growth PEG Ratio Comp Sheet

Notes:

  • PEG = P/E divided by earnings growth. I use two years of compounded earnings growth.
  • The right-most column is a PEG ratio variant.
  • The PEG average would be 1.67x instead of 1.87x excluding NET
  • I used EBITDA growth for Duolingo to avoid tax and stock comp noise, as most sell-side estimates are for GAAP EPS instead of non-GAAP. EBITDA growth will track non-GAAP EPS growth more closely than GAAP EPS growth and I have 19 analyst estimate data points for EBITDA with only 7 for non-GAAP EPS.
  • Axon is expected to get back to mid-30% EPS compounding next year.

This week, Meta received a pair of negative rulings from courts in New Mexico and California. Google was also included in the California case, but New Mexico was just Meta. The rulings will be appealed but the total exposure if they lose would be around $380 million (0.5% of its cash pile).

The rulings have investors concerned about renewed risks to Section 230. As a reminder, Section 230 protects social media platforms like Meta and YouTube from being held liable for the content that a user publishes on the apps. These cases attempted to circumvent Section 230 protections by claiming that the design of the actual platform was the source of damages, rather than the content itself. If the plaintiffs prevail on appeal, there are fears that this will lead to ongoing legal battles and Meta potentially being required to change some of the product features on its app.

To me, this is simply another reason to be nervous and anxious about Meta amid the recent tech sell-off over the last seven months. I think if a headline like this broke during times when Meta stock was "rocking and rolling" and investor optimism was booming, then the reaction wouldn't be nearly this sharp. Even if Meta has to actually change its product in response to this legal pressure, I envision that change being very subtle and immaterial to the engagement and monetization momentum the apps are enjoying. While forced changes also aren’t at all certain, even if that does happen, this company’s massive user base, balance sheet, world-class legal team and beloved products will make it better positioned than any peer to stay far ahead.

The company has run into a plethora of different legal battles in the past and has gotten through all of them better than skeptics expected every single time. I expect that to happen again here. I will keep accumulating shares despite this already being my largest position if the stock continues to decline.

A lot of people are comparing this to Meta’s big tobacco moment, and I just don’t see it (public tobacco companies are near highs by the way). The positives and negatives that stem from social media are highly polarizing and subject to debate. There is no debate, however, when it comes to smoking tobacco. We know it’s bad for you. We know it causes bad diseases. For Meta, there are instances of social media being used in toxic and unhealthy ways. At the same time, there are far more positive cases of connecting friends from across the globe, helping businesses grow and entertaining millions after a hard day. We just don’t hear about those things on the news.

Meta is being accused of harming the health of children, yet they don’t even allow users under the age of 13 on Facebook and Instagram in most markets (kids are roughly 5% of their total user base). They’re being ridiculed for succeeding in taking more screen market share as they keep users more engaged. They’re being criticized for winning. These rulings will be appealed and I expect Meta to feverishly use their elite team of lawyers to either get this overturned, or make sure any potential damages are entirely manageable. Intimidating headline, but I am confidently staying the course.

b. More

Meta CTO Andrew Bosworth (Boz) is taking on a new company role of making Meta “AI native.” He will continue to lead Facebook Reality Labs, but with budget and focus shifting away from that unit, he can add this to his plate and spearhead the important initiative. Meta is also partnering with ARM on a new AI data center CPU. They plan to "develop multiple generations of CPUs together to deliver AI experiences at scale."

"The first release, Arm AGI CPU, is Arm’s first ever data center CPU designed specifically for the AI era, delivering faster performance per rack far more efficiently than legacy CPUs. Meta will serve as the lead partner and co-developer for the Arm AGI CPU, which has been developed to optimize infrastructure for our family of apps and work alongside our custom MTIA silicon. The Arm AGI CPU will be available to the broader AI ecosystem through Arm and we will be releasing our board and rack designs for this CPU under the Open Compute Project later this year." – Press Release

In other Meta news, OpenAI is also discontinuing Sora, its AI video app that competed with Meta & YouTube. Finally, Meta hired the founding team from a new AI startup called Dreamer. The new talent will be added to Meta's increasingly deep bench of AI researchers, and will focus on building AI agents, per Bloomberg.

3. Uber (UBER) – AVs & Freight