Zoom Communications (ZM) Stock Today: AI Pivot Faces a Big Earnings Test
Zoom closed Friday at $78.63 and ticked up to about $79 after hours, valuing the company near $23.5 billion. Shares are still stuck in a multi-year range between roughly $56 and $91-more than 80% below 2020 highs. The setup into Monday's earnings: high margins, strong cash, modest growth.
Price and valuation snapshot
- Market cap: ≈ $23.5B
- TTM revenue: ≈ $4.75B | TTM net income: ≈ $1.19B | TTM EPS: $3.80
- Trailing P/E: ~20.7× | Forward P/E: ~13.5× (analyst estimates)
- 52-week range: $64.41 - $92.80 | Beta: ~0.8
Since 2022, ZM has chopped between ~$56 and $91. The appeal for value-oriented investors is simple: low-teens forward multiple, big cash generation, and a still-muted share price.
Fundamentals: slow growth, strong profitability
Q2 FY26 (ended July 31, 2025) showed modest growth with standout margins and cash flow.
- Revenue: $1.217B, up 4.7% YoY (4.4% cc)
- Enterprise: $730.7M, up 7% YoY | Online: $486.6M, up 1.4% YoY
- GAAP op margin: 26.4% | Non-GAAP op margin: 41.3%
- GAAP EPS: $1.16 (+65.7% YoY) | Non-GAAP EPS: $1.53 (+10% YoY)
Free cash flow hit ~$508M in Q2. Cash and securities were ~ $7.8B. Zoom repurchased ~6M shares in Q2 and has retired ~27.4M shares under the current plan.
Full-year FY26 guidance: revenue $4.825-$4.835B, non-GAAP EPS $5.81-$5.84, FCF $1.74-$1.78B. Versus a ~$23.5B market cap, that implies a mid- to high-single-digit FCF yield-rare for profitable software.
Strategy: from "video" to AI-first
Zoom dropped "Video" from its name in late 2024 and is pushing an AI-first work platform across meetings, chat, mail, calendar, phone, and customer experience. The message: keep customers on one stack, add AI to save time and improve outcomes.
AI Companion 3.0 and the NVIDIA partnership
Zoom's AI Companion 3.0 is built on a federated setup that mixes proprietary small language models with a new 49-billion-parameter LLM trained using NVIDIA's NeMo tools. Tasks route to the best model for speed, cost, and accuracy. Zoom also emphasizes it does not use customer content to train its or third-party AI models-key for regulated buyers.
Interoperability matters here: Zoom aims to work cleanly with Microsoft 365, Teams, Google Workspace, Slack, Salesforce, and ServiceNow. For more on NeMo, see NVIDIA's developer page here. Zoom's AI approach and data commitments are outlined on its newsroom here.
Zoom Phone: 10 million seats
Zoom Phone crossed 10M seats in about six years. It's pitched as an AI-first cloud phone system that replaces legacy PBXs and unifies calling, meetings, messaging, and contact center. The bet: Phone + Contact Center can offset slower growth in classic meetings.
Oracle partnership and enterprise credibility
On Oct 13, 2025, Zoom announced a go-to-market partnership with Oracle. Zoom CX can run on OCI, and Oracle has ~15,000 agents on Zoom Contact Center integrated with Oracle Service. It's a bigger push into large enterprise budgets-longer cycles, but larger deals.
Monday's earnings: setup and expectations
- Company guidance (Q3 FY26): revenue $1.210-$1.215B; non-GAAP EPS $1.42-$1.44
- Consensus: revenue ≈ $1.21B (+~3% YoY); EPS $1.43 (slightly below last year)
- Track record: average ~8.7% EPS beat over the last four quarters
What matters most on the call
- AI monetization: Are AI Companion, Phone, and Contact Center driving paid upsells yet? Management has pointed to fiscal 2027 for more visible monetization-any earlier signs would stand out.
- Enterprise vs. Online: Enterprise grew 7% in Q2 and large customers (>$100K TTM) rose to 4,274 (+8.7% YoY). Watch attach rates and expansion.
- Margins and buybacks: Can Zoom keep low-40% non-GAAP op margins while funding AI? Any update on extending repurchases?
- Updated guidance: Another lift would challenge the "low-growth" label; a cautious tone likely keeps the stock in its range.
Sentiment and technicals
Analysts and ownership
Aggregates show an average "Buy" from ~26 analysts with a ~$92 12-month target (mid-teens upside). Some shops sit at "Hold," even with targets in the low- to mid-$90s. Institutions hold roughly two-thirds to three-quarters of the float; recent insider sales have been modest and typical for a maturing software name.
Technical backdrop
Price has moved sideways between ~$56 and $91 since 2022. A clean breakout likely needs either accelerating growth or a stronger AI monetization path. Monday's guide and commentary could be the catalyst-or another reset to the middle of the range.
Risks to keep front of mind
- Competition: Microsoft Teams, Google Meet, and Cisco Webex bundle aggressively. Winning seats requires clear differentiation and a tight total-cost story.
- Legal overhang: Multiple shareholder law firms announced securities-fraud investigations in October. These are common pre-litigation steps but can create headline risk and potential legal costs if cases advance.
- Macro and AI execution: IT budgets are tight, AI interest is high but monetization is early, and buyers remain sensitive to data privacy and governance. If AI features don't translate into paid value, ROI on AI spend will be questioned.
Bottom line for November 23, 2025
Zoom heads into earnings near $79 with three pillars supporting the story: high margins and strong free cash flow, a fortress balance sheet with active buybacks, and an AI-first roadmap anchored by AI Companion 3.0, Zoom Phone's 10M-seat milestone, and the Oracle alliance. External validation (e.g., Gartner UCaaS leadership) helps with enterprise shortlists.
The counterpoints are clear: low-single-digit growth, intense competition from bundled suites, uncertain timing for AI monetization, and legal headlines. Guidance and concrete AI revenue signals will likely decide whether ZM breaks out of its range-or stays a value-leaning "show me" name into 2026.
Note: This article is for information and analysis only and is not investment advice.
Bonus for finance pros
If you're evaluating practical AI tools for your workflow, here's a curated starting point: AI tools for finance.
Your membership also unlocks:
