Why Facebook is a better buy than Apple

Apple (NASDAQ: AAPL) is a popular choice among big tech stocks, but Facebook (NASDAQ: FB) has a number of advantages over its FAANG counterparts. It’s cheaper, it grows faster, and its ad revenue stream seems more secure.

In this segment of “The Five”, registered on September 3, Fool contributors Jeremy Bowman and Brian Withers debate the two actions.

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Brian Withers: We’re gonna back down, we’re going with Jeremy first. Is there a stock in the tech space that you like better than Apple today over the next five or 10 years?

Jérémy Bowman: Of course, I will vote. We are talking about big tech, I will go with Facebook.

Toby Bordelon: It’s hilarious.

Withers: We were just talking about the domination of Facebook earlier. I love it. You go all the way around. [laughs]

Archer: Facebook gets a lot of hate from investors on Fintwit and other places, you know it’s the stock. People follow the actions on Twitter and other platforms. Maybe I understand from a consumer or user point of view, people might have qualms with the company.

But I think from a business point of view, first of all, compared to Apple. I haven’t watched recently. For me, Apple – the stock has performed incredibly well in recent years, but still seems a little more expensive than it should be. While Facebook, and I’m looking and, “why is the stock so cheap?” is what I think. Brian, we talked about Chinese stocks last week. I think a lot of them are trading at a discount, but that’s for obvious reasons like the regulatory environment there. Facebook, I don’t really know. The company is increasing its turnover, in the order of 25 to 30% per year. Their margins are huge. They have a great advertising business. I love what they do with virtual reality, Oculus. Mark Zuckerberg got pissed off about the metaverse during the last call for results. [laughs] We’ll see what happens with that. But the company is spending a lot of money in this area. I think that gives them some option. They are also taking a big step forward.

Funny that we were talking about them and Apple too, because they got into a fight after Apple released this new IDFA, which is Identity For Advertisers – I think a new advertising protocol for apps . Basically you go to your iPhone and they ask you if you don’t want to be tracked. So that was supposed to be a problem for Facebook. It doesn’t seem like it was, like what you said about ad blocking software, as big a problem as people thought. But that’s one of the reasons Facebook is trying to go into ecommerce more directly so it can keep all that money. Instead of having small businesses advertise with them then you just click and buy something from their site or whatever. Now you can just buy directly from them but Facebook. Like what we were saying, Apple has monopoly power in the App Store, and I think Facebook has it with their entire social media network. The stock always seems cheaper to me than it should be. They seem to exceed our expectations quite regularly, almost every time.

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of its CEO, Mark Zuckerberg, is a member of the board of directors of The Motley Fool. Brian withers has no position in any of the stocks mentioned. Jeremy bowman owns shares of Facebook. The Motley Fool owns shares and recommends Apple and Facebook. The Motley Fool recommends the following options: March 2023 long calls at $ 120 on Apple and March 2023 short calls at $ 130 on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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