There's little question that both Apple (AAPL 0.81%) and Facebook (META 1.10%) have been remarkable investments over the past decade, with each generating returns of roughly 600%. Yet recent changes to Apple's privacy policy have Facebook crying foul. Facebook even said, "We increasingly see Apple as one of our biggest competitors." Investors rarely care about such squabbles, however. They just want to know which offers the better opportunity over the coming year.

On this clip from Motley Fool Live recorded on Feb. 3, "The Wrap" host Jason Hall and Fool.com contributors Danny Vena and Brian Stoffel weigh in on which of these tech titans has the biggest runway in 2021.

10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of November 20, 2020

 

Jason Hall: Which is going to be a better investment over the next year, Apple or Facebook?

Danny Vena: Short answer is Apple.

I think we've talked about before the fact that Apple and the iPhone 12 is a huge hit. It probably is going to have roughly a two-year refresh cycle. Meaning that people are going to be replacing their older phones and replacing them with the iPhone 12 on and off over the next two years. That means to me that with an estimated 350 million phones out there, iPhones that are due for an upgrade, that's a lot of revenue for Apple.

We have also talked about the fact that the more iPhones that you get out there and there are somewhere in the neighborhood of between 900 million and 1 billion of them currently out in the field. With that many iPhones, you have that many more people that are going to be interested in potentially the Apple Watch, in potentially Apple's wearables, potentially in more of Apple services. The bigger installed base of iPhones you have out there, the more these other businesses are going to grow.

I was going to say, Facebook, there are opportunities there too, increase the advertising on other social media platforms.

But the reason that Apple and Facebook are going head-to-head and the reason that Facebook sees them as a competitor is because of the Apple's stance on the IDFA or the Identifier for Advertising that is on each iPhone and Apple has changed that from opting-out of advertising to actively opting-in for it. You're going to get a message on your apps and that message is just going to say, this app tracks your movement and your behavior, do you want to allow that? Right now, about 70% of the people out there currently opt in for the tracking.

But when it becomes actively opting to have this tracking, what they're expecting right now is that that number is going to drop from 70% to somewhere between 10 and 20%. That's going to hammer Facebook's ability to do targeted advertising. Between the two, I think Facebook has more headwinds, thank you Apple and Apple has more tailwinds. Between the two, for me, it's Apple hands-down.

Jason Hall: Very strong case there. Brian, what do you think here?

Brian Stoffel: Well, I'm going to start by saying, I am wary of offering prognostications that are five-years long, so you should [laughs] take this with a grain of salt.

Jason Hall: That's half the fun of doing a one-year prognostication.

Brian Stoffel: It is. I will take the other side of Danny's bet and here's what I'll say. Facebook's biggest competitor a year from now might very well be Instagram. Because of that, I think buying shares of Facebook could yield a better return just because there might be more of what we like to call value being unlocked in these two splitting apart or however it gets split apart. I'm not sure how much I actually believe that, but what I will say is that this is an alternative narrative to go against what Danny has to say.

Jason Hall: I like that. Here's this, it's abundantly clear. You think about all the tailwinds, they're certainly in Apple's favor. All of the headwinds, whether a regulatory, PR, the premium they can charge for ad because of the targeted ad revenue that's essentially going to go away on the install base of Apple products.

All the headwinds are against Facebook, which immediately means over the next year we're going to be totally wrong. Danny and I are going to be wrong, and Brian's going to be right. It's going to prove out to be Facebook [laughs].