Facebook and Apple Face Earnings Moment of Truth

NEW YORK (TheStreet) -- If premarket trading is any indication, investors are excited about Facebook's (FB) first-quarter earnings release but not about Apple's (AAPL). Both companies are scheduled to report results after the bell Wednesday, and their respective stock prices will likely gyrate wildly during the trading session in anticipation of those results.

Apple has turned into one of technology's red-headed stepchildren, while Facebook is one of the darlings of social media, a new world of intangibles, where nothing real is sold or bought beyond advertising. It's the promise of future revenue and billions of new users across the globe that has many investors giddy about Facebook's prospects.

Earnings don't really matter much here, and neither do any of the other metrics that value investors, the dinosaurs that we are, hold near and dear.

Facebook's trailing price-to-earnings ratio of about 95 is as meaningless as its price-to-sales ratio of more than 20.

The company is trading on expectations, and as long as those are exceeded, investors will pay up. The gravy train will end at some point, when obsolescence sets in and my generation turns away from Facebook after growing weary of seeing posts about little Billy's latest accomplishment, or when investors decide that the price of growth is simply too high. When that will happen is anyone's guess. Make no mistake, though -- it will happen.

Meanwhile, Apple, which actually produces real products, has become the poster child for low expectations. It's trading at 13 times trailing earnings and 11 times 2015 consensus estimates, while yielding 2.3%. Obviously, investors are skeptical.

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