Zoom Stock Faces Uncertainty Despite Long-Term Growth Potential
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Cathie Wood's Ark Invest predicts Zoom stock could soar over 2,000% to $1,500 per share by 2026 in an optimistic scenario. However, the actual odds of that happening are "virtually zero."
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Zoom's revenue growth slowed in 2022 but could reaccelerate as its various communications products and AI solutions gain greater adoption.
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Zoom has opportunities to monetize AI products like its virtual agent, conversational intelligence, and new generative AI features. Over 500,000 accounts have enabled Zoom's AI Companion so far.
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At its current valuation of 4.5 times sales, Zoom stock could be a bargain if revenue grows faster than the 3.9% annual rate expected by Wall Street analysts over the next 5 years.
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Investors who believe Zoom could meaningfully exceed revenue expectations may want to buy a small position, but realistic return expectations should be far below Ark's over 2,000% prediction.