Facebook (FB) is the No. 2 stock in the tech space according to RBC Capital tech analyst Mark Mahaney and though the company carries one of the largest market caps in the world, the fundamentals remain intact.

"What's new this year is that this is a major investment year," Mahaney said on CNBC's "Squawk Box" Friday morning. "Facebook talked about margins being down this year. Whether those are good investments or not, they probably are, but that's the new wrinkle for investors."

However, Facebook may represent a substantial opportunity for investors to make money in the stock due to a re-rating of the stock. "I think that is really going to happen because of fundamentals at the company more than anything else. But, I think that is the trend you are most likely to see," Mahaney said.

Furthermore, for investors of Facebook, Mahaney noted that they are at a point where the stock trades at 20-25 times earnings, for something "clearly north" of 30% earnings growth.

"You don't normally get that dislocation valuation," he added. "It is one of the major reasons it's our No. 2 pick in the space."

Facebook does not need to successful implant itself in the Chinese market in order to support future valuations, according to Mahaney.

"I think the chances of Facebook having any material success in China is very small," he said. "Even if they were to get in, there is already well-established social networks in those markets. But, they already have 1.8 monthly average users and 1.2 daily average users, they're fine by themselves."

(Facebook stock is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)

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