MoffettNathanson's Daniel Nathanson shares his take on Meta testifying in social media case

Speakers

Michael Nathanson — Founding Partner and Senior Research Analyst at MoffettNathanson

Brian Sullivan — Host

Summary

Despite the "wave of cases" and tragic testimony regarding social media's impact on children, the market largely ignores these headlines due to the sector's robust profitability.
Section 230 remains the primary shield for these companies; until federal laws change liability, fines are treated as "one-time" items and excluded from earnings analysis.
A divergence is emerging where smaller platforms (Snap) are already citing regulatory headwinds (age limits) as growth dampeners, while giants (Meta) continue to monetize effectively.
The long-term risk is not US regulation, but a fragmented global regulatory landscape (EU, LatAm, Asia-Pac) imposing stricter monetization rules that the US can no longer override.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
META	LONG	Michael Nathanson Founding Partner and Senior Research Analyst at MoffettNathanson	Nathanson explicitly holds a "Buy rating on Meta" with an "$810 price target." He notes that the market tends to "ignore all the fines and penalties" because the business model is "so strong and so profitable." The legal noise and emotional testimony do not alter the financial mechanics of the company. Section 230 provides immunity, and the market treats regulatory fines as non-recurring expenses, leaving the core valuation thesis intact. Long positions remain justified by fundamentals despite negative PR and litigation. Federal government changes to Section 230 or significant changes in liability laws.	0:19
SNAP	AVOID	Michael Nathanson Founding Partner and Senior Research Analyst at MoffettNathanson	Nathanson points out that "Snap's been warning that they're seeing slower user growth" specifically because of age usage limits and bans in markets like Australia, Spain, and the UK. Unlike the diversified giants, smaller platforms are more sensitive to regulatory friction. The "wave of cases" and international restrictions are already materially impacting Snap's user acquisition and growth metrics. Avoid due to visible regulatory drag on growth that is not affecting larger peers to the same degree. Successful pivot to new demographics or relaxation of international age-gating laws.	2:30
US BIG TECH	WATCH	Michael Nathanson Founding Partner and Senior Research Analyst at MoffettNathanson	Nathanson argues the US can no longer "dictate global digital markets" and the risk is that the EU, LatAm, or Asia-Pac will enforce their own rules making it "more difficult for these giant tech platforms to actually monetize." While US regulation (Section 230) is stagnant, the fragmentation of global internet laws creates a complex compliance environment that could erode margins for global platforms. Watch for non-US regulatory announcements as leading indicators of monetization compression. Harmonization of global digital laws or US re-asserting dominance in standard-setting.	—