Zoom Communications Inc (NASDAQ:ZM) is trading higher on Monday as investors take a fresh look at the company's early bet on AI startup Anthropic, which some Baird investment analysts now believe could be worth $2 billion to $4 billion.
Can Zoom Turn Its AI Bet Into a Comeback Story?
According to Baird, Zoom's 2023 investment in Anthropic may end up returning roughly 78 times its original value, based on Anthropic's current $350 billion valuation, CNBC reported. The exact size of Zoom's investment was never disclosed, but SEC filings show the company made $51 million in "strategic investments" that quarter.
In a note on Monday, the analysts called the stake a "hidden gem," saying that while the market has been focused on Zoom's efforts to reaccelerate revenue and expand its AI offerings, the Anthropic investment could prove far more valuable.
Zoom's shares have struggled to regain momentum since the pandemic-era boom faded and workers returned to offices, making the potential multibillion‑dollar windfall from Anthropic especially significant for the company.
Technical Analysis For Zoom
Zoom is currently trading above its key moving averages, indicating bullish momentum. The stock’s position, trading 11.9% above its 20-day SMA and 18.1% above its 200-day SMA, suggests a strong upward trend.
The RSI is at 53.11, which is considered neutral, indicating that the stock is neither overbought nor oversold at this time. This level suggests that there could be room for further upward movement. MACD is below its signal line, indicating bearish pressure on the stock, suggesting a weakening momentum, so traders should watch for any shifts that could signal a change in trend strength.
Key support is at $81.50, which traders should monitor closely; a breach below this level could indicate a trend reversal. Without a defined resistance level, the stock may continue to push higher, especially if it maintains its current momentum.
The golden cross in October, when the 50-day SMA crossed above the 200-day SMA, marked a significant bullish signal for Zoom. This crossover often indicates a longer-term uptrend, reinforcing the current positive sentiment.
Over the past 12 months, Zoom has gained 15.94%, reflecting a solid performance amid market fluctuations. This longer-term trend suggests that the stock has been resilient and could continue to attract buyers if the momentum persists.
Positioned at 112.9% of its 52-week range, the stock is currently near its highs, which can be a double-edged sword. While this suggests strong bullish sentiment, it also raises the risk of a pullback if profit-taking occurs.
ZM Price Action: Zoom shares were up 11.17% at $95.36 at the time of publication on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro.
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