Zoom (ZM): Exploring Valuation as New NVIDIA AI Partnership Aims to Boost Enterprise Solutions

Zoom Communications (ZM) is taking a thoughtful step forward this week by partnering with NVIDIA to introduce a hybrid language model that combines its in-house AI with NVIDIA’s Nemotron technology. This move targets efficiency and privacy for enterprise clients in finance, healthcare, and government.

See our latest analysis for Zoom Communications.

After unveiling this AI collaboration, Zoom’s latest share price sits at $83.16, up 14.9% over the past 90 days. This signals some regained momentum despite a one-year total shareholder return of -3.7%. Recent upticks suggest investors are cautiously optimistic about Zoom’s push into cutting-edge enterprise AI, even as long-term holders are still waiting for a sustained turnaround.

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With Zoom trading well below its analyst price target and posting only modest revenue growth, the question for investors is clear: is the current dip a genuine buying opportunity, or has the market already priced in the full potential of its AI expansion?

Most Popular Narrative: 9.9% Undervalued

With a fair value set at $92.30 and the latest close at $83.16, this dominant narrative points to untapped value in Zoom. The crowd sees opportunity as pivotal growth levers and evolving product lines drive the thesis.

Strong and accelerating adoption of AI-powered features, such as AI Companion, Virtual Agent 2.0, and Contact Center Elite, demonstrates growing customer reliance on advanced collaboration and productivity tools. This positions Zoom at the forefront of enterprise digital transformation and is likely to expand the addressable market, drive multi-year revenue growth, and increase recurring revenue stability.

Read the complete narrative.

Want to know why the fair value is much higher than today’s price? The answer lies in some bold growth assumptions for revenue, margins, and future profit multiples. Can you guess which numbers fuel this optimism? Dive into the full narrative and see what's driving this surprising valuation.

Result: Fair Value of $92.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition from larger platforms and the challenge of fully monetizing new AI features could reduce Zoom's long-term growth outlook.

Find out about the key risks to this Zoom Communications narrative.

Build Your Own Zoom Communications Narrative

If you want to dig deeper or have your own take on Zoom's outlook, you can build a personalized view in just a few minutes, and Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Zoom Communications.

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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.

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