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    Why Zoom (ZM) Is Up 5.5% After Raising Guidance And Expanding Its Buyback Program – And What's Next

    Simply Wall St·05/24/2026 06:30:34
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    • Earlier this week, Zoom Communications, Inc. reported first-quarter fiscal 2027 results, with revenue rising to US$1,239.01 million and net income increasing to US$425.68 million, alongside higher earnings per share and updated guidance calling for US$1.27 billion in second-quarter revenue and about US$5.08–US$5.09 billion for the full year.
    • The company also completed a large share repurchase tranche, authorized an additional US$1.00 billion buyback, and highlighted rapid adoption of its AI Companion tools, while its early investment in Anthropic has grown into a stake now valued at roughly US$1.30 billion.
    • We’ll now examine how Zoom’s raised full-year guidance and expanded buyback program could reshape its previously steady, AI-led investment narrative.

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    Zoom Communications Investment Narrative Recap

    To own Zoom today, you need to believe its AI powered collaboration and contact center platform can offset a maturing core video business and rising competition from bundled suites like Microsoft 365 and Google Workspace. The key short term catalyst is whether accelerating AI Companion adoption and enterprise upsell can keep revenue growth intact, while the biggest risk remains customers consolidating onto larger ecosystems, where this quarter’s guidance uplift and AI traction do not fundamentally remove that threat.

    The most relevant update here is Zoom’s expanded US$1.00 billion buyback authorization, on top of US$625.0 million remaining and US$3,075.0 million already spent. For shareholders focused on earnings per share resilience and capital discipline, this capital return program now sits directly alongside AI adoption, enterprise wins and the Anthropic stake as a central part of the near term story around Zoom’s ability to support per share value even if top line growth stays modest.

    Yet beneath the upbeat guidance and buybacks, investors should still be aware of the risk that large enterprises increasingly standardize on rival platforms and...

    Read the full narrative on Zoom Communications (it's free!)

    Zoom Communications’ narrative projects $5.6 billion revenue and $1.4 billion earnings by 2029.

    Uncover how Zoom Communications' forecasts yield a $111.50 fair value, a 6% upside to its current price.

    Exploring Other Perspectives

    ZM 1-Year Stock Price Chart
    ZM 1-Year Stock Price Chart

    Some of the lowest rated analysts were assuming only about 2.6 percent annual revenue growth to roughly US$5.1 billion and shrinking margins by 2028, so you may find their much more cautious view on competition and pricing power useful context if this quarter’s AI and buyback news ends up shifting those expectations.

    Explore 4 other fair value estimates on Zoom Communications - why the stock might be worth 15% less than the current price!

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.