Facebook Inc. (FB) shares are poised to open slightly higher Wednesday after Needham & Co. LLC upgraded its estimates and target price ahead of the company's second quarter earnings next week.

Needham raised its target price to $185 from $165, with analyst Laura Martin striking a bullish tone on user growth.

"Our channel checks indicate more robust advertising revenue growth than we previously projected owing to more video ads (i.e., higher CPMs), faster Instagram revenue growth, and lower competition from SNAP than we had previously projected," Martin wrote.

Facebook is now "becoming the de facto near-monopoly mobile choice for brands and direct response (i.e., lead-gen) advertisers," she added.

Needham also raised its second quarter revenue estimate to $9.18 billion, up 43% year on year and 2% ahead of its prior estimates. It also expects earnings per share to come in at $1.09, up 55% compared with last year.

Needham expects advertising revenue to reach approximately $9 billion, up 44% year on year and 2% above their prior estimates, and it expects mobile advertising revenue to represent 85% of total ad revenue in the second quarter, implying mobile revenue of approximately $7.65 billion.

The investment bank has kept a buy rating on the stock. "We are buyers of FB based on our belief that digital markets are "winner-take-most" markets, and FB is a key winner when advertisers are trying to reach consumers on their mobile devices because 1.2B consumers spend about 50 minutes each day on one of FB's 4 apps," Martin wrote.

Facebook's shares rose 1.6% to $165.47 early Wednesday afternoon. The company will report after the bell on Wednesday, July 26.

Facebook is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB? Learn more now.

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