Why one tech fund manager is hot on Amazon, not so much on Facebook

Risks facing Facebook

Shares of Amazon are more attractive than Facebook stock because the e-commerce giant's long-term path to growth is clearer than the social network's road to future revenue gains, Josh Spencer, portfolio manager of the T. Rowe Price Global Technology Fund, said Wednesday.

Amazon has two routes to success with its online retail business and its Amazon Web Services unit, the market leader in cloud computing services, Spencer said. But in his view, it's hard to see the next leg of growth for Facebook.

He said he's not convinced its will pay off, though he acknowledged he could be wrong. Spencer also said he does not like to be viewed as betting against Facebook CEO Mark Zuckerberg.

"It's not so much taking something away from Facebook. It's just seeing opportunities elsewhere," he told CNBC's "Squawk on the Street."

To be sure, Facebook is still expanding its core business. In its latest quarterly report, it said advertising revenue surged 57 percent year over year to $5.2 billion.

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Still, Spencer does not hold Facebook in the fund he manages, but he said he was an aggressive buyer of Amazon when the stock swooned in February.

While Amazon's track record has earned the company the benefit of the doubt, Spencer acknowledged investors must bear in mind its stock price. Shares of the e-commerce giant are trading at $724, close to an all-time high, with a lofty price-to-earnings ratio near 300.

At that price, the stock is less attractive than it was just a few months ago, Spencer said. However, it pays to buy Amazon on the pullbacks, he said.

"The fact that we sit here today with two giant businesses — the online retail business as well as the cloud computing business — is a testament to [CEO Jeff] Bezos' perseverance and his foresight," Spencer said.

Disclosure: The analyst and his family own shares of Amazon. T. Rowe Price holds greater than a 1 percent share of the company.