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Facebook's Valuation Exceeds Exxon's: This Investment Pro Is OK With That Metric

Facebook's Valuation Exceeds Exxon's: This Investment Pro Is OK With That Metric - Facebook, Inc. NASDAQ:FB, Exxon Mobil Corporation NYSE:XOM

Facebook Inc (NASDAQ: FB) has seen its stock rise more than 18 percent since the start of 2016 and recently hit an all-time high of $128.33 after the company reported its second-quarter results.

As a result, the social media's empire market capitalization has surged to around $355 billion now and outranks Exxon Mobil Corporation (NYSE: XOM)'s $347 billion valuation.

Cathie Wood, the CEO and CIO of ARK Investment Management is OK with Facebook's valuation exceeding Exxon's and explained why during an appearance on CNBC's "Squawk Box" segment.

According to Wood, Facebook is showing a "re-acceleration in some already strong growth rates." She added that Facebook, along with the other companies that make up the FANG acronym, make up the "new economy" that are taking market share from the "old economy."

Wood went on to justify Facebook's valuation, which is greater than Exxon's valuation, despite a revenue base that is roughly 10 times less than the oil giant's revenue base.

First, energy prices could come under pressure if sales of electric vehicles continue to surge. She added that electric vehicles are up to four times more energy efficient compared to regular cars, creating an uncertain outlook for oil prices and the entire sector.

On the other hand, Facebook is taking massive market share and is also "changing all of our lives." Meanwhile, Facebook reported an acceleration of top-line growth in the second quarter from 52 percent to 59 percent.

"Something is happening out there," she said. "Big share shifts— and Facebook is one of the major beneficiaries."

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