Core Viewpoint - Zoom Communications is set to report its earnings on November 24, 2025, with expectations of a 3.62% increase in EPS and a 3% rise in quarterly revenue compared to the previous year [2][3]. Company Performance - The stock of Zoom Communications closed at $81.86, reflecting a decline of 2.8% from the previous day, underperforming the S&P 500, which fell by 0.92% [1]. - Over the past month, shares of Zoom have increased by 5.26%, outperforming the Computer and Technology sector's gain of 1.64% and the S&P 500's gain of 1.48% [1]. Earnings Estimates - Analysts project an EPS of $1.43 for the upcoming quarter, with a total revenue estimate of $1.21 billion [2]. - For the full year, the Zacks Consensus Estimates suggest earnings of $5.83 per share and revenue of $4.82 billion, indicating increases of 5.23% and 3.41% respectively from the previous year [3]. Analyst Sentiment - Recent modifications to analyst estimates indicate a positive outlook for Zoom Communications, as upward revisions reflect confidence in the company's business operations [4]. - The Zacks Rank system currently rates Zoom Communications at 3 (Hold), with no changes in the consensus EPS projection over the past 30 days [6]. Valuation Metrics - Zoom Communications has a Forward P/E ratio of 14.44, which is below the industry average Forward P/E of 28.7, suggesting a valuation discount [7]. - The company has a PEG ratio of 7.18, significantly higher than the Internet - Software industry's average PEG ratio of 2.1 [8]. Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 66, placing it in the top 27% of over 250 industries [9].

Core Insights - The Q3 earnings season has been predominantly negative for software companies, indicating a challenging environment for the sector [1] Group 1: Earnings Season Overview - The current Q3 earnings cycle has seen a significant downturn for software companies, attracting increased investor scrutiny [1] Group 2: Analyst Background - Gary Alexander has extensive experience in covering technology companies on Wall Street and has worked in Silicon Valley, providing insights into current industry trends [1]

Core Insights - The company Zemen's energy has experienced a surge in demand from AI data centers, leading to record quarterly revenue of nearly 10.5 billion euros in Q4 [1] - The firm has upgraded its midterm growth and profitability targets, expecting profit margins before special items to rise to 16% by 2028, up from a previous upper bound of 12% [2][10] - The company's shares listed in Frankfurt rose by nearly 2.5% following the announcement, and its main listing has more than doubled in value this year, making it the sixth largest company in Germany [2] Financial Performance - The company achieved a revenue growth of 15% in the fiscal year 2025, successfully meeting and exceeding its targets [5] - The organization has maintained double-digit margins across all business areas except for wind, where the focus has been on stabilization [5][6] Wind Business Outlook - The wind business is currently stabilizing, with efforts focused on fixing quality issues and ramping up factory output [6][7] - The company has increased output by 30% at its large offshore factory in Germany compared to the previous year, indicating successful productivity measures [7] Shareholder Returns - The company is set to announce the return of dividend payments for the first time in four years, following the lifting of a dividend ban linked to government regulations [8][9] - The company aims to return approximately 50% of its net income to shareholders [9] Market Outlook - The company anticipates continued growth in electricity demand driven by various factors, including AI, which is expected to account for 5-6% of global electricity consumption by 2030 [11][12] - The company emphasizes the importance of diversifying its customer base and applications beyond AI to mitigate market volatility [12][14] - The underlying infrastructure for electricity is deemed essential for the growth of AI and other industries, positioning the company favorably in the market [14][16]

Core Insights - Converged Technology Professionals (CTPros) and Carahsoft Technology Corp. have formed a strategic partnership to enhance access to Zoom's cloud-based communication solutions for K-12, higher education, and government agencies [1][4] - The partnership aims to streamline procurement processes and promote the adoption of secure communication tools across State, Local, and Education (SLED) sectors [2][4] Group 1: Partnership Details - Carahsoft will act as CTPros' Master Government Aggregator®, facilitating procurement through its extensive portfolio of Federal, State, and Local contract vehicles [1][2] - CTPros will provide advisory services, solution design, deployment, and ongoing support for Zoom products, enhancing communication infrastructure for public service and education [2][3] Group 2: Benefits and Solutions - SLED organizations will gain access to secure and scalable communication tools, including Zoom Phone, Zoom Meetings, Zoom Contact Center, and advanced AI features [2][3] - The partnership is expected to improve productivity, enhance remote teaching and learning, and deliver more responsive services to constituents [2][3] Group 3: Company Backgrounds - CTPros specializes in unified communications, contact center modernization, and has extensive experience in telecom and IT, focusing on enhancing productivity for government offices and educational institutions [3][6] - Carahsoft is recognized as a trusted provider of IT solutions for public sector organizations, offering a wide range of services including cybersecurity, multi-cloud, and AI solutions [7]

Core Insights - A few stocks, particularly Shopify and Zoom Video Communications, saw significant gains during the pandemic due to the rise of stay-at-home trends [1] - The excitement around these stocks has diminished, prompting a closer examination of their current performance [1] Shopify - Shopify's platform gained traction as consumers shifted to online shopping, leading to continued popularity and growth [2] - The company reported a 31% year-over-year sales growth in its latest period, achieving double-digit percentage sales growth for ten consecutive periods [2] Zoom Video Communications - Zoom's cloud-native platform, which integrates various communication functionalities, became essential during the pandemic, resulting in a surge in popularity [5] - In its latest earnings release, Zoom reported nearly 5% sales growth year-over-year and an adjusted EPS of $1.53, reflecting a 10% increase [8] Overall Market Performance - While many pandemic stocks have seen declines, Shopify remains a leader in performance and fundamentals, benefiting from the sustained trend of online shopping [6][9]

Core Insights - Financial giants are showing a bearish sentiment towards Zoom Communications, with 56% of traders exhibiting bearish tendencies and only 26% being bullish [1] - Significant investors are targeting a price range for Zoom Communications between $72.5 and $130.0 over the past three months [2] - The current trading volume for Zoom Communications is 921,417, with a price increase of 1.19%, now at $84.15 [13] Options Trading Analysis - A total of 23 unusual trades were identified, with 3 puts valued at $524,518 and 20 calls valued at $1,190,769 [1] - The options trading patterns indicate a mix of bullish and bearish sentiments, with notable trades including a bullish put and several bearish calls [8] - The volume and open interest data for options trading provide insights into liquidity and interest for Zoom Communications within the identified price range [3][4] Analyst Ratings - Two professional analysts have provided insights on Zoom Communications, with an average price target of $100.0 [10] - UBS has lowered its rating to Neutral with a new price target of $85, while Rosenblatt maintains a Buy rating with a price target of $115 [11]

Core Insights - The article highlights five AI-focused stocks in the Internet Software and Services sector that are expected to perform well in 2026, driven by increased IT spending and the growing demand for web-based infrastructure and applications [2][4]. Company Summaries Palantir Technologies Inc. (PLTR) - Palantir's AI strategy integrates its Foundry and Gotham platforms, promoting AI adoption in government and commercial sectors, with a focus on processing large datasets for real-time insights [5][6]. - The company is aligning its AI initiatives with U.S. defense priorities, showcasing its capabilities in high-profile projects like the Department of Defense's Open DAGIR [6]. - Palantir's AI Platform (AIP) has shown adaptability across various industries, with a strong customer base in government and large corporations [7][8]. - Expected revenue and earnings growth rates for Palantir are 41.1% and 43% respectively for the next year, with a 20.9% improvement in earnings estimates over the past week [9]. Snowflake Inc. (SNOW) - Snowflake is positioned to benefit from the rising demand for cloud-based data platforms, with its AI Data Cloud unifying structured and unstructured data [11]. - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, indicating a 25.5% CAGR, which supports Snowflake's growth trajectory [12]. - Snowflake's platform is gaining traction among large enterprises, enhancing their ability to manage data and improve customer experiences [13][14]. - Expected revenue and earnings growth rates for Snowflake are 22.3% and 33.9% respectively for the next year, with a 4% improvement in earnings estimates over the last 60 days [15]. Datadog Inc. (DDOG) - Datadog is experiencing growth due to new customer additions and increased adoption of its cloud-based monitoring platform amid digital transformation [16]. - The company unveiled over 125 new products at DASH 2025, including AI observability tools, which enhance customer engagement and competitive positioning [17][18]. - Datadog's expected revenue and earnings growth rates are 19% and 15.4% respectively for the next year, with a 0.9% improvement in earnings estimates recently [20]. Atlassian Corp. (TEAM) - Atlassian is benefiting from the demand for remote working tools, with significant adoption of its AI-powered features, showing a 25X year-over-year increase in AI interactions [21][22]. - The company's focus on generative AI features is expected to drive long-term revenue growth, particularly through collaborations with OpenAI [23]. - Expected revenue and earnings growth rates for Atlassian are 20.8% and 27.7% respectively for the current year, with a 0.6% improvement in earnings estimates recently [24]. Zoom Communications Inc. (ZM) - Zoom is capitalizing on the hybrid work trend, with AI-driven solutions like Zoom Doc and AI Companion seeing significant user growth [25][26]. - The AI Companion has achieved a fourfold increase in monthly active users year-over-year, enhancing operational efficiencies for customers [26][27]. - Expected revenue and earnings growth rates for Zoom are 3% and 0.1% respectively for the next year, with a 3.9% improvement in earnings estimates over the last 60 days [28].

Core Viewpoint - Investors are evaluating the value propositions of 8x8 (EGHT) and Zoom Communications (ZM) to determine which stock offers better value at present [1] Valuation Metrics - Both EGHT and ZM currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - Value investors focus on various valuation metrics to identify undervalued companies, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] Specific Valuation Comparisons - EGHT has a forward P/E ratio of 6.00, significantly lower than ZM's forward P/E of 14.01, suggesting EGHT may be undervalued [5] - The PEG ratio for EGHT is 0.85, while ZM's PEG ratio is 6.97, indicating EGHT's expected earnings growth is more favorable relative to its price [5] - EGHT's P/B ratio stands at 1.97 compared to ZM's P/B of 2.76, further supporting the notion that EGHT is the more attractive value option [6] - Based on these valuation metrics, EGHT is rated with a Value grade of A, while ZM has a Value grade of C, reinforcing EGHT's position as the superior value choice [6]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on hybrid operating environments and mobile device penetration, prompting businesses to invest in web-based infrastructure and security software [1] - The Internet Software industry is ranked in the top 28% of Zacks Industry Rank, indicating expected outperformance in the market over the next three to six months [2] Company Highlights Palantir Technologies Inc. (PLTR) - Palantir's AI strategy integrates its Foundry and Gotham platforms, focusing on AI adoption in government and commercial sectors, with an expected revenue growth rate of 41.1% and earnings growth rate of 43% for next year [6][10] - The company is involved in significant government projects, such as the Department of Defense's Open DAGIR initiative, enhancing military operations through AI [7] - Palantir's AIP boot camps have attracted over 1,000 companies, showcasing its platform's capabilities across various industries [8] Snowflake Inc. (SNOW) - Snowflake is set to benefit from rising demand for cloud-based data platforms, with an expected revenue growth rate of 22.3% and earnings growth rate of 33.9% for next year [11][15] - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, with a CAGR of 25.5%, supporting Snowflake's growth trajectory [12] - Snowflake's AI Data Cloud is gaining traction across multiple industries, enhancing enterprise capabilities in data management and analytics [14] Datadog Inc. (DDOG) - Datadog is experiencing growth from new customer acquisitions and increased adoption of its cloud-based monitoring platform, with an expected revenue growth rate of 19% and earnings growth rate of 15.4% for next year [16][20] - The company unveiled over 125 new products at DASH 2025, including AI observability tools, enhancing its competitive position [17][18] - Datadog's solutions are increasingly used to monitor AI-powered applications, driving broader product usage [19] Atlassian Corp. (TEAM) - Atlassian is benefiting from the demand for remote working tools, with a 25X year-over-year increase in AI interactions among over 1 million monthly active users [22] - The company's AI-powered Rovo platform and automation tools are driving growth in premium and enterprise editions [23] - Atlassian's collaboration with OpenAI to enhance its software with generative AI features is expected to boost revenue [24] Zoom Communications Inc. (ZM) - Zoom is capitalizing on the hybrid work trend, with its AI Companion achieving a fourfold increase in monthly active users year-over-year [26][27] - The platform's integration with third-party applications and custom AI functionalities is enhancing operational efficiencies for customers [28] - Zoom has an expected revenue growth rate of 3% and earnings growth rate of 0.1% for next year [29]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, helping investors select stocks with high potential for market outperformance [2] Zacks Style Scores Overview - The Style Scores categorize stocks based on value, growth, and momentum characteristics, assigning ratings from A to F, with A indicating the highest potential for outperformance [3] - The Value Score identifies attractive stocks using financial ratios like P/E and Price/Sales, appealing to value investors [3] - The Growth Score focuses on a company's future prospects, analyzing earnings and sales growth to find sustainable growth stocks [4] - The Momentum Score helps investors capitalize on price trends by analyzing recent price changes and earnings estimate revisions [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investing strategies [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize returns [10] Stock Highlight: Zoom Video Communications - Zoom Video Communications is currently rated 2 (Buy) on the Zacks Rank and has a VGM Score of B, benefiting from increased demand for remote work solutions [12] - The stock has a Momentum Style Score of B, with shares rising 4.7% over the past four weeks, and an upward revision in earnings estimates for fiscal 2026 [13] - The Zacks Consensus Estimate for Zoom's earnings has increased by $0.02 to $5.83 per share, with an average earnings surprise of +8.7% [13]