Zoom Video Communications reported fourth-quarter earnings that exceeded analyst expectations with adjusted earnings per share of $1.42 and revenue of $1.15 billion, along with plans to buy back up to $1.5 billion worth of shares. The company also highlighted its growth in enterprise customers and addressed competition from other video call services, leading to a surge in its stock price.
Nvidia's stock has surged due to its pioneering role in AI technology, but investors seeking cheaper options may consider Zoom Video Communications and Confluent, both poised to benefit from AI adoption. Zoom's AI features could drive growth in video conferencing and contact center markets, while Confluent's data streaming platform is expected to play a crucial role in powering AI applications with real-time data. Both companies offer attractive multiples for investors looking to capitalize on the AI boom.
Nvidia's stock has surged due to its leading role in AI technology, but investors seeking alternatives may consider Zoom Video Communications and Confluent. Zoom's adoption of generative AI in video conferencing could unlock new growth opportunities, while Confluent's data streaming platform could play a central role in helping organizations build AI applications powered by real-time data. Both companies offer potential for growth in the AI market at attractive valuations compared to Nvidia.
U.S. equities are set for a third-straight week of gains as S&P 500 futures edge higher. Gap posts better-than-expected Q3 results, prompting Wall Street firms to raise price targets. Citi raises price target on Ross Stores and recommends focusing on TJX Companies. Morgan Stanley cuts price target on Walmart but maintains an overweight rating. Citi upgrades Zoom Video Communications to neutral but warns of competition from Microsoft. Barclays raises price target on Crowdstrike ahead of earnings report. Wells Fargo lowers price target on Okta due to concerns about customer attrition. Bath & Body Works faces multiple price-target cuts. Applied Materials receives price-target increases despite criminal investigation report. Bank of America downgrades Marriott Vacations on disappointing Q3 results.
Yelp's shares jumped over 9% after activist investor TCS Capital Management took a stake in the firm, urging the company to explore strategic alternatives, including a sale. AutoZone's shares fell over 5% after missing revenue expectations for the fiscal third quarter. Lowe's Companies advanced 2.8% on a first-quarter earnings report that beat analyst expectations, but the company cut its full-year outlook. Chevron added 3.1% in midday trading after HSBC upgraded the energy producer to buy from hold. Zoom Video Communications' shares tumbled more than 7% following the video conferencing stock's first-quarter report.
Despite reporting upbeat Q1 earnings, Zoom Video Communications' shares fell due to concerns over the growth prospects of its enterprise business. Analysts are divided on the company's future, with some maintaining an equal-weight rating and others reaffirming an outperform rating. While Zoom's online business outperformed, the pressure on its enterprise growth is expected to increase before potential stabilization in FY24-25. The company's emphasis on optimizing go-to-market functions and maintaining a strong balance sheet is viewed positively, but concerns over growth prospects and SBC expense remain ongoing overhangs.
Zoom Video Communications' Q1 earnings beat estimates, but weakening trends in its enterprise business caused its stock to fall. Sales growth slowed for the ninth straight quarter as the company adjusts to slower product demand in the post-coronavirus emergency era. To reignite growth, Zoom Video aims to build a broader business communications platform using artificial intelligence tools.
