James Martin/CNET

Internet analysts at Piper Jaffray have both good news and bad news for the world's largest social network: Teens continue to lose interest in Facebook but are showing an increasing appetite for Instagram, a Facebook property.

The mixed-bag news comes from the investment bank and asset management firm's semi-annual survey of upper-income and average-income teens in the US. Piper Jaffray's spring 2014 report Taking Stock With Teens, published Tuesday, surveyed around 5,000 teens, and includes findings spanning fashion, video games, Apple products, and social networks.

"We saw Instagram take the mantle for the most preferred social teen site," Piper Jaffray senior analyst and managing director Gene Munster said.

Thirty percent of surveyed teens chose Instagram as their most important social network, making it the top social property for youngsters for the first time in the history of the survey.

Piper Jaffray

"Just to recap the changes over the last six months," Munster said, "interest level in Facebook went from 27 [percent] to 23 [percent], Twitter 31 [percent] to 27 [percent], Instagram 27 [percent] to 30 [percent]."

Just one year ago, Facebook was the preferred social network for roughly 33 percent of teens, marking a relatively steep decline in interest from an important audience in a short amount of time. The report, then, adds to a mounting pile of evidence suggesting that teens, in search of a more fun zone, are tiring of Facebook.

But as Instagram, now with 200 million monthly active users, gains in teen popularity, Facebook's teen-appeal problem appears less dire than before. As Piper Jaffray confirms, Facebook-owned Instagram has supplanted Facebook as the go-to social network for teens in the US. As Instagram gets serious about serving up advertisements, the social network can use its photo app to continue to pull in advertising dollars around the desired demographic.

Facebook shares closed at $58.19 on Tuesday. The social network has been slowly rebounding on Wall Street. Shares took a hit once news surfaced that Facebook would purchase virtual reality technology company Oculus for $2 billion.