Zoom 'Protected From Competition' Due To Clients, Anthropic AI Investment: Analyst

Zoom Communications Inc (NASDAQ:ZM) is poised to benefit from AI opportunities and its Anthropic investment, according to Wedbush.

The Zoom Communications Analyst: Analyst Dan Ives reaffirmed an Outperform rating, while raising the price target from $95 to $110.

The Zoom Communications Thesis: The company is relatively protected from competition. That’s due to its enterprise customer base of around 185,000 clients, Ives said in the note.

Check out other analyst stock ratings.

Only around 4,350 clients contributing more than $100,000 in TTM (trailing 12 months) revenue suggests "opportunities to expand spend across the ZM portfolio," he added.

Zoom is also well positioned to capitalize on AI opportunities. The strength of its product portfolio, featuring AI integrations, is driving incremental revenue and margin expansion, Ives stated.

The company invested around $51 million in Anthropic in 2023, Ives mentioned. "At Anthropic's reported current valuation of ~$350+ billion, we expect that Zoom's current stake in Anthropic to be ~$1.6 billion to ~$4.4 billion depending on dilution/timing that we expect to further grow as the company gets closer to IPO," he further wrote.

ZM Price Action: Shares of Zoom Communications had risen to $95.46 at the time of publication on Tuesday.

Image: Shutterstock