Wolfe upgrades Zoom, citing improved growth profile and AI monetization
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Stronger growth drivers and a discounted valuation could fuel a rally in shares of Zoom Communications, Wolfe Research said. The investment firm upgraded the communications technology stock to outperform from peer perform on Wednesday, and analyst Alex Zukin's new price target of $115 implies that Zoom could rally 27% from current levels. Wolfe had no prior price target. ZM 1Y mountain ZM 1Y chart "ZM shares have lagged broader software over the past several years as investors questioned the durability of the company's growth profile following the post-pandemic normalization," Zukin wrote. But Zoom "has significantly outperformed" the iShares Expanded Tech-Software Sector ETF, down 21% in 2026, "and during the drawdown starting on 12/22/25, ZM stock has been best [performing] in our coverage." Zoom has rallied 9% so far this year and 26% over the past six months. Zukin wrote that previous concerns, such as limited visibility into the durability of Zoom's growth and AI monetization, are now fading. The analyst now sees increasing evidence that Zoom's growth profile is set to reaccelerate. "Strength in Zoom Contact Center, sustained mid-teens growth in Zoom Phone, and emerging monetization from Voice AI are driving improving growth durability that is not reflected in current expectations," he wrote. "With ~$8bn of net cash on [the balance sheet], and ~$3.9B more over the next two years, as well as some potentially meaningful stakes in AI natives, we believe ZM has meaningful dry powder to pursue growth-accretive M & A in adjacencies such as Voice AI and Contact Center software, to extend & or accelerate the growth trajectory." Zoom currently trades at less than 10 times its free cash flow for the 2027 calendar year, offering a meaningful discount to other non-security, cash-generative software peers and making for a favorable risk/reward, Zukin added. "In our view, this valuation continues to underappreciate ZM's platform expansion, exposure to Voice AI, and improving growth durability. As confidence in these drivers builds, we believe ZM is positioned for both earnings growth and multiple expansion," he added.