"The expense growth guidance did come in higher than expected," Mark May, internet analyst at Citi, told CNBC's " Squawk on the Street " on Thursday. "I think that is what is limiting the upside on what otherwise was another spectacular quarter."

Facebook reported quarterly earnings that beat analysts' estimates on Wednesday, and revenue that topped expectations, as ad revenue grew 53 percent. Though Facebook's shares initially jumped as much as 3 percent after hours, they are up less than half a percent by Thursday morning.

Facebook is making more money than investors expected — but it already has plans to spend it, and that's deflating the stock, one analyst said.

During a conference call with investors, Facebook executives said the company plans to share revenue with creators of videos, emphasizing episodic, high-quality content. The Menlo Park, Calif.-based company also reiterated plans to build data centers, hire aggressively and slow the amount of new advertisements it adds to the Facebook platform.



CEO Mark Zuckerberg also defended heavy investments in the Oculus virtual reality ecosystem, which may not start to make meaningful money for Facebook for 10 years.

"VR for Mark [Zuckerberg] and the team has always been a long-term play," Eric Sheridan, who covers U.S. internet and interactive entertainment as managing director at UBS equity research, told "Squawk on the Street" on Thursday. "Long-term growth, one of the big drivers is going to be VR, and a report we put out this week is supportive of that."



Mobile users — 84 percent of that ad revenue — and a growing focus on video content helped the company boost its enormous social media reach, Zuckerberg said.



"Investors are very focused on those long-term drivers," Sheridan said.

Both Sheridan and May said they think that Facebook is likely to outperform, eclipsing fears about its spending over the course of the year. For instance, May said, Facebook is "just scratching the surface" of growth in Instagram, even if it is picking up features pioneered by rival Snapchat.

"We really like what Facebook is doing with this property," May said. "Yes, copying some of the best features of their peers, but being a fast follower and copying and seeing a lot of success from that."



May said he's focused on not just Facebook, but properties like WhatsApp and Messenger.

"Facebook is now much more than just the big blue app," May said. "It's really a portfolio play. Lots of ways of generating incremental revenue for Facebook over the next several years."



Disclosure: Citi and UBS own a greater than 1 percent stake in Facebook and Facebook is an investment banking client of Citi and UBS.