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Zoom Upgraded to 'Outperform' by Wolfe Research

  //science-technology.news-articles.net/content/2 .. om-upgraded-to-outperform-by-wolfe-research.html
  Published in Science and Technology on Thursday, February 5th 2026 at 13:36 GMT by CNBC
      Locales: California, New York, UNITED STATES

New York, NY - February 5th, 2026 - Zoom Video Communications (ZM) received a significant boost today as Wolfe Research upgraded the stock from 'Underperform' to 'Outperform', accompanied by an ambitious price target of $650. The upgrade signals growing confidence in Zoom's turnaround strategy, specifically focusing on a resurgent enterprise business and burgeoning opportunities in artificial intelligence (AI) monetization.

Shares of Zoom, already enjoying a 16% year-to-date increase, saw a modest rise of less than 1% in premarket trading, reaching $541.44 at the time of this report. However, analysts believe this is just the beginning of a more substantial climb, driven by a confluence of factors that address previous concerns regarding Zoom's growth trajectory post-pandemic.

For much of 2024 and early 2025, Zoom faced headwinds as the demand for video conferencing normalized after the explosion of remote work spurred by the COVID-19 pandemic. Concerns about slowing growth and increased competition from rivals like Microsoft Teams, Google Meet, and Cisco Webex weighed on investor sentiment. The 'Underperform' rating from Wolfe Research reflected these anxieties.

However, the analysts at Wolfe Research now believe that Zoom has successfully navigated these challenges and is poised for a new phase of growth. Their recent note highlights a "clear inflection" in the enterprise business, suggesting that Zoom is regaining traction with larger organizations.

This rebound in enterprise adoption is attributed to several key strategic initiatives. Zoom has been focusing on expanding its platform beyond simple video conferencing, evolving into a more comprehensive communication and collaboration suite. This includes features like Zoom Phone, Zoom Whiteboard, and a robust set of developer tools, enabling businesses to integrate Zoom functionality into their existing workflows.

But the most significant catalyst for the upgrade, according to Wolfe Research, is Zoom's increasing focus on AI. The company has been rapidly integrating AI capabilities into its platform, offering features like automated meeting summaries, intelligent noise cancellation, and real-time translation. These AI-powered tools are designed to enhance user experience, improve productivity, and provide valuable insights from meetings and conversations.

"We're becoming more confident in Zoom's ability to monetize AI," the Wolfe analysts stated, indicating that they expect Zoom to successfully translate these AI features into revenue-generating opportunities. Zoom's strategy appears to be two-pronged: offering AI features as part of premium subscription packages and developing specific AI-powered solutions targeted at particular industries.

Industry experts predict that the AI-powered communication and collaboration market is set for substantial growth in the coming years. Businesses are increasingly looking for ways to leverage AI to automate tasks, improve decision-making, and enhance customer engagement. Zoom, with its established platform and large user base, is well-positioned to capture a significant share of this market.

The $650 price target represents a substantial upside potential from Zoom's current trading price. Wolfe Research's analysts likely factored in a number of variables into their projections, including projected revenue growth, profitability margins, and market valuation multiples. The target suggests the analysts believe Zoom can sustain a higher earnings multiple as it demonstrates consistent growth and profitability driven by its enterprise business and AI innovations.

However, it's important to note that the stock market is inherently volatile, and analyst upgrades are not guarantees of future performance. Potential risks to Zoom's growth include increased competition, macroeconomic headwinds, and potential challenges in effectively monetizing its AI offerings. Investors should conduct their own thorough research and consider their own risk tolerance before making any investment decisions.

Despite these risks, the Wolfe Research upgrade provides a compelling bullish signal for Zoom, suggesting that the company is on the right track to regain its position as a leading player in the communication and collaboration space. The emphasis on enterprise solutions and, crucially, the aggressive integration of AI, appears to be winning over analysts and potentially signaling a new era for Zoom. Investors will be closely watching Zoom's upcoming earnings reports for further evidence of this turnaround.