Facebook's warning that it expects its growth to slow later this year has spooked investors, but they may be overreacting, analyst Gene Munster said Thursday.
Facebook CFO David Wehner said during Facebook's conference call Wednesday that ad revenue growth will likely decelerate in coming quarters. But Piper Jaffray's Munster told CNBC Wall Street had already accounted for growth of 40 percent and 38 percent in the third and fourth quarters, respectively.
The social media giant reported revenue growth of 43 percent in the second quarter.
"I think [Wehner] was just trying to temper some expectations," Munster said in a "Squawk Box" interview.
Facebook on Wednesday reported adjusted second-quarter earnings of 50 cents per share on $4.04 billion in revenue, compared with Wall Street expectations of 47 cents per share on $3.99 billion.
Despite the earnings beat, share prices were down nearly 4 percent Thursday. (Click here for the latest price.)
Munster said investors should not expect Facebook to quickly ramp up revenue from its Instagram photo-sharing business and its messaging apps. The company will likely focus on making money from Instagram next year and possibly do the same with Facebook Messenger and WhatsApp in 2017 or beyond, he said.
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Investors were also seen reacting to higher costs. Facebook's expenses in total came in at $2.77 billion, up 82 percent from the same period last year.
Mark Mahaney, lead Internet analyst at RBC Capital Markets, said Thursday that Facebook has so far managed its investments wisely.
"This is still early stage for Facebook. The bigger mistake would be under-investing, not over-investing," he told "Squawk on the Street." "Unlike Google, they seem to be better at guiding to and then meeting or beating those expense goals."
While Mahaney said he expects a "pretty solid deceleration" in Facebook's growth rate, that deceleration will also be consistent and moderate.
"If that's what happens you're going to have close to $4 in earnings in 2017, and the stock's going to go higher. We may retrace shortly here, but overall fundamentals are about as strong as you can find in the sector and the valuation is still reasonable."