Mark Zuckerberg, founder and chief executive officer of Facebook Inc., smiles during a news conference at the company's headquarters in Palo Alto, California, U.S., on Wednesday, Oct. 6, 2010.

Guggenheim raised its rating of Facebook's stock to buy from neutral on Thursday, saying shareholders are becoming more accustomed to data leaks and privacy uncertainty.

"Investors will continue to gain comfort with the incremental financial risk created by content and privacy concerns," Guggenheim analyst Michael Morris said in a note.

The social media platform's growth has also "remained solid," Morris said, especially within Instagram. The analyst sees "potential for commerce and messaging monetization opportunities as attractively priced within shares."

However, Guggenheim sees key limitations to Facebook's near-term growth, notably in video content.

"We still view the company's video strategy as un-developed and see the economic opportunity as limited without uniquely recognizable content and a presence on the television screen to complement the mobile experience," Morris said.

Facebook shares rose 1.4 percent in premarket trading from Wednesday's close $173.54 a share. Guggenheim has a $200 price target on the stock, up from $175 a share.