Zoom's Strategic Investment in Anthropic Enhances Market Position
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 24 2024
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Should l Buy ZM?
Source: Newsfilter
Zoom Video Communications Inc. has seen its stock price decline by 5.01%, hitting a 5-day low amid broader market weakness, with the Nasdaq-100 down 1.87% and the S&P 500 down 1.21%.
The recent strategic investment in Anthropic, a leading AI firm, positions Zoom for growth in the AI sector, shifting its narrative from a software utility to a value holding company. With approximately $7.9 billion in cash reserves, Zoom is well-positioned to mitigate risks associated with slower growth in its core business while pursuing strategic investments. Analysts believe that Zoom's stock is undervalued, with its intrinsic value not fully reflected in the current market capitalization of around $27 billion.
This investment not only enhances Zoom's AI capabilities but also serves as a competitive advantage against rivals like Microsoft. As the company continues to leverage its financial strength, it may attract more investor interest, despite the current market challenges.
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Analyst Views on ZM
Wall Street analysts forecast ZM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZM is 99.33 USD with a low forecast of 85.00 USD and a high forecast of 115.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
12 Buy
7 Hold
1 Sell
Moderate Buy
Current: 92.200
Low
85.00
Averages
99.33
High
115.00
Current: 92.200
Low
85.00
Averages
99.33
High
115.00
About ZM
Zoom Communications, Inc. provides an artificial intelligence (AI) work platform for human connection. Zoom Workplace, the Company’s AI-powered, open collaboration platform built for modern work, enables us to streamline communications, increase employee engagement, optimize in-person time, improve productivity, and offer customer choice with third-party apps and integrations. Zoom Workplace, powered by Zoom AI Companion, includes collaboration solutions like meetings, team chat, phone, scheduler, whiteboard, spaces, Workvivo, and more. Its communication products include Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom scheduler, and Zoom mail and calendar. Its productivity products include Zoom Docs, Zoom Whiteboard, Zoom Clips, and Zoom Tasks. Its space products include Zoom Rooms, Zoom Workspace Reservation, and Zoom Visitor Management. It serves various industries, including education, financial services, government, retail, manufacturing and healthcare.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Digital Sovereignty Push: Tuttle highlights a significant move towards digital sovereignty in Europe, ensuring that core systems and communications cannot be easily disabled if relations with the U.S. deteriorate, which will impact future technology procurement and investment decisions.
- Beneficiary Companies: He identifies several European companies, including OVH Groupe, IONOS, Orange, Deutsche Telekom, and Capgemini, that could benefit from this shift, indicating a market tilt towards local technology solutions.
- Strained U.S.-EU Relations: Relations between the U.S. and EU have further strained after President Trump threatened tariffs on the EU for not supporting his Greenland acquisition bid, which may intensify scrutiny on U.S. tech companies and affect investor confidence.
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