Facebook Will Be Biggest Beneficiary Of Mobile & Video Ads, Could 'Subsume' Twitter's Usefulness

While shares of Facebook Inc (NASDAQ: FB) trading at all-time highs, Twitter Inc (NYSE: TWTR)'s shares continue to languish in the mid-$30 area.

RBC Capital analyst Mark Mahaney was on CNBC Wednesday to discuss where the stocks of these two companies are headed.

Facebook

Mahaney was asked what Facebook is worth. He replied, "They are worth $105, that's our price target. At one point, Facebook probably was worth $15 because they couldn't figure out mobile. Once they figured out mobile, which is where all their dramatic growth has been over the last three years, then the stock deserved to appreciate to go higher.

"It just hit a all-time high yesterday. Maybe there's a little bit of positive sentiment about Oculus Rift coming out of the E3 conference last year."

Related Link: RBC's Mark Mahaney: Netflix Now A 'Small Buy For Us,' Stock Split 'Irrelevant'

He continued, "We're starting to see more apps within Instagram, that's the greenfield opportunity. That can probably generate $2 billion in new revenue for the company next year and what's the big theme in Internet advertising this year? Mobile and video, and Facebook is probably the single best derivative off that trend."

Twitter

On his current outlook for Twitter, Mahaney said, "We're on sidelines on Twitter. We haven't recommended the stock in quite some time, we did after the IPO.

"There's too much of wood to chop at that company both in terms of fixing the product for user and fixing the product for advertisers. There's a lot of uncertainty about it. If one company can take out the other's TAM or total adjustable market, it's more likely to be Facebook taking up Twitter's TAM than the other."

Mahaney said the "usefulness" of Twitter could all be "subsumed" by Facebook.