Facebook's core advertising business is just fine, especially as the social network looks to monetize its messaging platforms, RBC Capital Markets' lead internet analyst told CNBC on Monday.

"The market way overreacted to the [revenue] print and some of the guidance," RBC's Mark Mahaney said on "Squawk on the Street." "I think its the most appealing risk-reward name in large cap, maybe in tech, but certainly in internet."

Across big technology stocks Facebook, Amazon, Netflix and Google parent Alphabet, market enthusiasm and valuations have become "reasonably robust," Mahaney said.

Those valuations don't leave a lot of near-term investing opportunity, except for in Facebook, he added. "Given that trade off, that's our number one pick here."

On July 26, Facebook plunged more than 24 percent after the social media giant missed estimates on daily active users in its second-quarter earnings and issued disappointing forward guidance.

Even then, Mahaney was bullish on the company, which has been struggling with data leaks and fake news scandals.

"I think they're being overly conservative in terms of the outlook. I don't think fundamentals are going to deteriorate as quickly as they are implying," he told CNBC in July. "If they don't get the security platform right, it's all over. We think they will, if they can, this is a good asset. This is the opportunity to buy this stock here."

And now, Mahaney said the upcoming monetization of Whatsapp and Facebook Messenger opens up a huge opportunity for profit.

"They are now going to start monetizing the two largest messaging applications in the world, with WhatsApp and with Facebook Messenger. Those are huge profit pools this company is just starting to uncover," he said.

Mahaney said he sees Facebook regaining a stock value of $217 per share, the high it hit on July 25, just before its second quarter earnings report.

Facebook was trading around $180, only about 2 percent higher than its July 26 low.