U Surges on Strong Results; META Doubles Down on AI Race

0327 ｜Dolphin Focus

🐬 Macro / Sector

1. Trump said on Mar 26 via social media that, at Iran's request, the airstrike on Iran's energy facilities would be delayed by another ten days to 8:00 pm ET on Apr 6. Previously, he pushed back the initial 48-hour ultimatum issued on Mar 21 by five days to Mar 27. Iran denied asking for a delay, saying only indirect exchanges of information had taken place. With a substantive deal before Apr 6 unlikely, the risk of renewed military escalation remains even after the postponement, and the geopolitical risk premium is not fully cleared.

🐬 Single Stocks

1.$Netflix(NFLX.US)

Netflix raised subscription prices across the US. The ad-supported Standard tier goes from $7.99 to $8.99 per month, its second hike since launch in late 2022 (the first was in Jan 2025 from $6.99 to $7.99), with new prices already effective for new users. The move underscores a shift from pure user growth to ARPU expansion. With global sub growth slowing, price hikes plus content spend and ad monetization are key to steady growth, supporting near-term revenue and profit while posing churn risk.

2.$Unity Software(U.US)

Unity Software preannounced preliminary Q1 2026 results, with core revenue and profit metrics beating the company's prior guidance range. In Feb, management guided Q1 revenue of $480–$490 mn, below Street estimates, which had triggered a pullback. Unity jumped ~14% in after-hours. Dolphin's take: see 'Unity Q1 pre-announcement: revenue and profit above prior guide'.

3.$Costco Wholesale(COST.US)

Costco China teased on its official WeChat that a 'Black Diamond' membership is coming. This is Costco's first premium paid tier in China: the annual fee will be above the RMB 299 Gold Star, with a core benefit of 3% cashback on all purchases, plus a free household card, premium services and cross-border shopping privileges. A 3% rebate is the highest globally and materially boosts perceived value, likely driving upgrades among high-ticket users and improving renewals and membership fee revenue. China has a large, fast-growing base (the Shenzhen store's 140k sign-ups rank No.1 globally) but relatively low renewal rates, and Black Diamond enables better segmentation to lock in higher-quality customers, supporting member mix and ARPU.

4.$Meta Platforms(META.US)

Meta will lift its investment in the El Paso, Texas data center from $1.5 bn to $10 bn, nearly a sixfold increase. The AI-dedicated site is slated for 2028, with 1 GW of power to support model training, inference and AI recommendation systems across its social platforms. This marks a full-throttle bet on AI compute and reflects a drive to build proprietary infrastructure and control the full stack. Near term, capex will spike and weigh on profitability.

5. Dolphin on earnings and calls

Meituan: 'Meituan: Three heavy headwinds — will food delivery stay on its knees?' 'Meituan (Trans): Q1 food delivery keeps narrowing losses; Douyin is indeed stepping up spend!'

China Mobile: 'China Mobile: Taking the tax reform hit head-on — is the dividend profile intact?'

GuMing: 'GuMing: As subsidies fade, the 'Costco of tea' stays resilient!' 'GuMing (Trans): Dine-in rate has returned to a relatively healthy level'