Facebook Stock Is 'Now Normalizing': Morgan Stanley CEO

Facebook stock is "now normalizing" and will continue its march higher, said James Gorman, chairman and CEO of Morgan Stanley, which was the lead underwriter on the social network's initial public offering.

Gorman told "Squawk Box" on Friday that all the problems with Facebook on its first day of trading were "as bizarre as the projections the day before" that the stock would go to $80 a share. "Both were equally ridiculous," he said.

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Calling Facebook a "great American story," he predicted, "It's now normalizing. It's back in the $30s. The management and the staff of Facebook deserve that. The investors deserve it. And I think it will keep recovering."

(Read More: Facebook Rolls Out Social Search Feature)

James Gorman, CEO, Morgan Stanley

Matthew Belvedere | CNBC

Gorman, who appeared on CNBC right after Morgan Stanley reported better-than-expected earnings, also responded to criticism of the company's role as lead underwriter of the Facebook IPO. "I couldn't be prouder of our technology team," he said. "They are world class, and I believe they led or co-led the next seven deals in that space."

"They're the real deal," he continued. "And I'd use them every time."

—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC