The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Facebook Stock Forecast

Summary

I dare say Facebook is now the better long-term investment than Apple. Apple’s trumpeting of privacy issues against Facebook reeks of hypocrisy.

My takeaway is that Apple just wants a share of the ad money that Facebook is mining from iPhone/iPad owners.

Alphabet paid billions of dollars so that its Google data-gathering search engine remains the default search engine on Apple’s mobile Safari browser.

Apple is just envious of Apple and Alphabet’s successes in mobile advertising.

Apple is the god dictator of the massive iOS platform and yet it failed to build a successful mobile advertising business.

I’m thinking of dumping 80% of my Apple (AAPL) holdings to buy more Facebook (FB) shares. Facebook’s audacious defiance of Apple’s hypocritical privacy policy on iOS apps convinced me that Zuckerberg would do anything to help his company retain its high double-digit growth in annual revenue.

Facebook’s stock jumped as high as 12% after its outstanding Q4 earnings report. This is not a temporary bounce back. I checked the daily technical indicators and FB is now a strong buy.

(Source: Investing.com)

I Know First has a bullish one-year forecast for FB. It is worth risking re-aligning a portfolio to add more Facebook shares.

Further, FB really is a better buy than Apple because, unlike the declining smartphone business, the digital advertising industry remains a fast-growing opportunity. My fearless forecast is that Apple will never be able to come up with a viable advertising strategy to exploit its iOS platform. Facebook will continue to rule the advertising money goldmine on iOS devices.

Advertising market tracker firm eMarketer predicts that Facebook will capture $67.2 billion of the global digital ad spending this year. Facebook’s advertising revenue in FY 2018 was only $55 billion. A projected 22% y/y growth in FY 2019 ad revenue should be enough inspiration for investors to buy FB right now.

In spite of the privacy violations brouhaha, Facebook’s Q4 revenue still posted a +30% Y/Y growth to $16.9 billion. Mobile advertising accounted 93% for Facebook’s quarterly advertising revenue of $16.4 billion. Facebook’s Q4’s net income was $6.88 billion. Full FY 2018 revenue of Facebook was $55.84 billion (up 3% Y/Y). FY 2018’s net income was $22.11 billion (up 39% Y/Y).

(Source: Seeking Alpha)

As a greedy investor, I do not care if Facebook is super mega-voracious when it comes to data gathering. Like Alphabet, Facebook knows that invasive personal data mining is key to any digital advertising operator’s success. Zuckerberg, the real-world coder/programmer will keep coming up with brilliant new ways to create more covert and invasive data collecting software Android/iOS apps. Tim Cook, the supply-chain specialist who cannot code, will never be able to prevent Facebook from data mining and ad-spamming iOS/iPad owners.

Apple is just pissed because Facebook’s mobile ad platform found a gold mine in iOS device owners. Facebook has also so far refused to share this bonanza with Apple. The schism between Facebook and Apple is all about money. Unlike the defiant Facebook, digital advertising leader Alphabet capitulated. Google is paying billions of dollars to Apple to keep Google as the default search engine on iOS Safari browser.

Yes, Apple is a hypocrite when it claims to care about protecting privacy. It allowed itself to be bribed by Alphabet so that the best and most-pervasive data-mining app, Google Search, can continuously farm the data traffic and online habits of mobile iOS Safari users. I now recommend to Zuckerberg to suck it up and just go bribe Apple too.

It was reported last year that Alphabet could be paying up to $9 billion/year to Apple to let Google Search continue its spying activities on iOS Safari users. Since it is a smaller firm than Alphabet, I believe a bribe of $2 billion/year to Apple will let Facebook apps gather as much personal information/habits and online traffic from iOS devices.

Another example of Apple’s hypocrisy over its privacy policies is its 2018 act of storing iCloud data of its Chinese users inside China’s state-run telecom servers. Zuckerberg must be pissed that Apple is willing to let Chinese authorities spy for free on China-based iOS devices. With over 2 billion monthly active users, Facebook is bigger than China and America. It should be allowed to spy on all Facebook, Messenger, Instagram, and WhatsApp users located anywhere in the world.

Facebook Is Not Afraid of Apple

Apple must be envious of Facebook’s massive success. Apple, the supreme god of the iOS platform, failed to develop a decent mobile ads business. I suspect that Tim Cook now regrets not emulating Alphabet’s (GOOG) highly successful mobile ads business built around the Android OS platform. Cook got too enamored with the iPhone’s success. Now that the iPhone is on the decline, Apple does not have a healthy advertising business to offset it.

Apple Facebook to pull its data gathering Onavo Protect VPN (Virtual Private Network) iOS app last year. Clever Zuckerberg simply renamed Onavo Protect as ‘Facebook Research’. Zuckerberg then sidestepped Apple’s iTunes store and used third-party beta testing app platforms Applause, uTest, and BetaBound to distribute it as a ‘paid social media study’ iOS app. Facebook, through Applause and BetaBound proxies, was paying up to $20/month for people aged 13 to 35 years old to install and let Facebook Research run in the background. Facebook is even offering $20 per successful referral install and usage of the said ‘paid social media study’ app.

There you go if Facebook is very much willing to bribe teens and adults to use its spying VPN app, Zuckerberg must also be willing to bribe Tim Cook/Apple. Corporate bribery is a common practice anyway. Facebook has over $41 billion in cash. Facebook can easily afford even if Apple demands $4 billion/year to turn a blind eye to Facebook’s pervasive data collecting activities on iOS. They can keep this deal a secret like what Alphabet and Apple did with their search engine treaty.

Conclusion

Learned investors should applaud (not be appalled) Facebook’s penchant for invasive data collection activities. Spying on its users and its competition helps Facebook retain its high-double digit growth rate. If people really gives an F, Facebook, Instagram, and the whole internet would have lost billions of active users. The last time I checked, billions of people are addicted to Facebook. Facebook is more addictive than cocaine or heroin. This is why Facebook is a buy and hold forever stock.

Further, hypocrisy is not the monopoly of Apple. Attention-seeking politicians, news writers, bloggers, and moralists are conveniently forgetting that ruthless players involved in capitalism and war do not really give a damn over privacy issues. Privacy issues hurled at Facebook helps politicians gain media mileage. It also gave newspapers, TV stations, and online sites more eyeballs. More traffic for them, the more ad money they make.

I recommend that investors (who do not have enough cash lying around) should consider reducing their exposure to China-vulnerable Apple. They should use the money (from selling AAPL) to buy more FB. Facebook’s advertising-centric business has little to zero exposure to China’s cold war with Trump. Unlike those China-made iPhones, the communist bullies cannot threaten to impose higher duties on ad placements spammed on Messenger, Instagram, and on Facebook’s mobile/web portals.

Past I Know First Forecast Success with FB:

On January 29, 2019, before Facebook Published its Earnings Reports, I Know First published a premium article saying that Facebook’s Stock is a strong buy.

FB is with 15.3% gain since this bullish forecast.

Current I Know First subscribers received this bullish FB forecast on January 29, 2019.

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Please note-for trading decisions use the most recent forecast.