2024-03-05 16:32:21 ET
Summary
- I believe Zoom Communications has a strong investment thesis with a focus on AI enhancements and potential in AR/VR technology.
- The company's Q4 earnings exceeded expectations, driven by enterprise revenue growth and strategic product developments.
- Zoom's integration with AR/VR technologies positions them for expansion and innovation in the growing VR market for enterprise.
Investment Thesis
I believe heading into FY 2025 (and post Q4 2024), Zoom Video Communications ( ZM ) has the setup to be a strong buy, led by their focus on AI enhancements, with upside possible in places like the intersection AR/VR technology in their workplace.
Their stronger than expected Q4 earnings, driven by a steady increase in enterprise revenue and strategic product developments, underpins Zoom's continued strong market position in the video conferencing market, with market share hovering around 57% , allowing them to maintain strong gross margins. I was also particularly excited by their announcement of a $1.5 billion share repurchase program....
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Zoom Post Q4: Conservative Guidance, AI Features Are Key