Facebook Inc (NASDAQ:FB) has made a nice run higher in July. Investors are growing more and more aware that Instagram’s advertising value proposition is far greater than Snap Inc’s (NYSE:SNAP) ad value proposition. Thats why FB stock and SNAP stock have moved in opposite directions. SNAP stock is down 15% in July. FB stock is up 11% in July.

FB stock is now up 20% since SNAP’s IPO in early March. SNAP stock, meanwhile, is down almost 40%.

That trend will only continue, in large part thanks to Instagram being the perfect advertising platform in today’s world.

Instagram Is More Valuable Than You Think

On Wednesday morning, Needham & Co reiterated a “Buy” rating on FB stock while upping the price target to $185 (from $165). Analyst Laura Martin said that her channel checks indicated faster than expected revenue growth at Instagram. She believes that “Facebook is becoming the de facto near-monopoly mobile choice for brands and direct response (i.e., lead generation) advertisers.”

The upgrade shouldn’t really come as surprise. The era of social selling is upon us, and that makes Instagram maybe the most valuable platform in the entire social media world. Ask any Millennial consumer how they discover brands. Chances are high that Instagram is one of their first answers. Either brands are advertising on Instagram Stories, or they are using so-called “Instagram models” to promote brand awareness. The latter is more interesting, since people tend to follow people. Its the new wave of product endorsement.

And Instagram is the king of this space. A picture is worth a 1,000 words, and Instagram has thousands of pictures. The picture-heavy news feed is aesthetic, and it allows for advertisements (either through IG models or through paid ads) to be seamlessly integrated. The platform has started to integrate e-commerce optionality so transaction frictions have been largely removed. Instagram also has a balance of ephemeral content and permanent content, allowing for both immediate and long-lasting impressions.

Everywhere else, digital advertising platforms are struggling to figure out how to replicate Instagram’s success. Snap can’t quite figure it out because everything posted there disappears in 24 hours. Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) lacks the picture-heavy, easy-scroll feed that makes Instagram pleasing to use. In fact, Alphabet recently launched a curated news feed that looks a lot like a Facebook or Instagram feed. Twitter Inc (NYSE:TWTR) doesn’t really have the same picture-friendly environment conducive to product discovery.

Even retail behemoth Amazon.com, Inc. (NASDAQ:AMZN) realizes the value of social selling. It recently launched Spark, a social platform which looks a lot like Instagram for product discovery on Amazon.

At the end of the day, Instagram is a lot more valuable than you think. Millennials today discover products through Instagram more than any other medium. This trend of social selling is just beginning to ramp up. That means Instagram is still in the early innings of its growth story.

FB Valuation Remains Compelling

There is a theme with FB stock, and it goes something like this: nowhere in the market will you find such excellent growth at such a good value.

Over the next 5 years, analysts peg Facebook’s earnings growth at around 26% per year. Facebook always beats Street earnings estimates, so the realistic growth trajectory is likely in excess of 26%. Nonetheless, stocks with that sort of big, secular growth profile tend to trade at a premium to growth. For example, Amazon is looking at a very similar 27% annualized earnings growth rate over the next 5 years. AMZN stock trades at about 90-times FY18 earnings-per-share estimates.

FB stock trades at 27-times FY18 earnings-per-share estimates.

Yep. Analysts are projecting similar earnings growth for FB and AMZN over the next 5 years, but FB is trading at a 70% discount to AMZN.

That isn’t at all a knock against AMZN, but rather a strong endorsement of FB. Its just far too cheap to ignore.

To repeat myself, nowhere in the market will you find such excellent growth at such a good value.

Bottom Line on FB Stock

FB has been one of my favorite stocks in the market for a long time. It remains a favorite today because we are just at the beginning of a big ramp in social selling. Instagram revenue growth will continue to impress, and FB stock will continue to head higher.

As of this writing, Luke Lango was long FB and AMZN.