Core Insights - The large-cap growth sector is expected to face challenges in 2026 due to high valuation multiples and uncertainty regarding the profitability of significant AI investments made this year [1] Group 1: Market Outlook - The market is anticipated to wobble, indicating potential volatility in large-cap growth stocks [1] - There is a need to explore overlooked stocks to outperform the market in the upcoming period [1] Group 2: Analyst Background - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has advised several seed-round startups [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications [1]

Core Viewpoint - Zoom Communications reported strong Q3 fiscal 2026 earnings and revenues, surpassing estimates and showing year-over-year growth, indicating positive momentum for the company [2][10][11]. Financial Performance - Adjusted earnings per share for Q3 fiscal 2026 were $1.52, exceeding the Zacks Consensus Estimate by 6.29% and increasing 10.1% year over year [2]. - Revenues reached $1.23 billion, beating the consensus mark by 1.4% and reflecting a 4.4% year-over-year increase [2]. - Enterprise revenues, which constitute 60.3% of total revenues, grew 6.1% year over year to $741.4 million, while online revenues increased 2% to $488.4 million [3]. Customer Metrics - The number of customers contributing over $100,000 in revenues over the trailing 12 months grew by 9.2% to 4,363, accounting for 32% of total revenues [3]. - The total number of Enterprise customers was approximately 185,100, with a net dollar expansion rate of 98% for Enterprise customers [4]. Operating Metrics - Non-GAAP gross margin improved to 80% from 78.9% year over year, with non-GAAP operating income rising 10.7% to $507 million [6][7]. - Operating margin increased to 41.2% compared to 38.9% in the previous year [7]. Cash Flow and Balance Sheet - Total cash, cash equivalents, and marketable securities as of October 31, 2025, were $7.9 billion, up from $7.8 billion as of July 31, 2025 [8]. - Net cash provided by operating activities was $629.3 million for Q3, compared to $515.9 million in the previous quarter [8]. Guidance - For Q4 fiscal 2026, Zoom expects revenues between $1.230 billion and $1.235 billion, with non-GAAP earnings per share projected in the range of $1.48 to $1.49 [10]. - For the full fiscal year 2026, revenues are expected to be between $4.852 billion and $4.857 billion, with non-GAAP earnings per share anticipated in the band of $5.95 to $5.97 [11]. Market Sentiment - Since the earnings release, there has been a 10.37% upward trend in consensus estimates, reflecting positive investor sentiment [12]. - Zoom holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [14].

Core Insights - Zacks Premium offers tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1] Zacks Style Scores Overview - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2] Style Scores Breakdown - **Value Score**: Focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales to find attractive investment opportunities [3] - **Growth Score**: Concentrates on a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow for sustainable growth [4] - **Momentum Score**: Targets stocks with upward or downward price trends, utilizing recent price changes and earnings estimate shifts to identify optimal buying times [5] - **VGM Score**: Combines all three Style Scores to provide a comprehensive rating, highlighting stocks with the best value, growth potential, and momentum [6] Zacks Rank Integration - The Zacks Rank model uses earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.81% since 1988, significantly outperforming the S&P 500 [7][8] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while stocks with a 3 rank should also have favorable Style Scores to ensure potential upside [9][10] Company Spotlight: Zoom Video Communications - Zoom Video Communications is rated 2 (Buy) on the Zacks Rank and has a VGM Score of B, benefiting from increased demand for remote work solutions post-pandemic [11] - The company is projected to have year-over-year earnings growth of 7.6% for the current fiscal year, with upward revisions from analysts and a Zacks Consensus Estimate of $5.96 per share [12]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **US Technology Equities** sector, particularly the **software and AI** landscape, highlighting the transition towards AI productization expected by **2026** [1][2]. Core Insights - **AI Productization Timeline**: 2026 is projected as the pivotal year for AI productization within enterprise software, moving from early-stage deployment to widespread enterprise integration [1][2]. - **Current AI Deployment Challenges**: Companies are still in the early stages of AI experimentation, facing challenges in hiring skilled talent and achieving meaningful results from initial projects [1][2]. - **Shift in Investment Focus**: There is a notable shift from hardware to software investments as companies begin embedding AI into their existing workflows, with significant advancements seen in companies like **Oracle, Microsoft, Salesforce, and ServiceNow** [1][2][5]. - **Monetization Visibility**: Vendors controlling structured enterprise processes are expected to have improved monetization visibility as AI becomes a value-added feature in their product suites [2]. Financial Performance Highlights - **Q3 Earnings Performance**: Most companies reported modest revenue beats but significant improvements in non-GAAP operating income and EPS, indicating early economic benefits from AI deployments [7][9]. - **Revenue Growth Constraints**: Despite increased interest in AI, enterprise budget expansions remain modest, limiting revenue growth [9]. - **Profitability Boost from AI**: AI-driven efficiencies are enhancing unit economics, leading to higher non-GAAP operating income and EPS, even without substantial revenue increases [9]. Company-Specific Insights - **Preferred AI Stocks**: The report identifies **Oracle (ORCL), Microsoft (MSFT), ServiceNow (NOW), and Salesforce (CRM)** as preferred stocks likely to benefit from their strategic positioning in the AI landscape by 2026 [2][5]. - **Earnings Revisions**: Companies like **Microsoft** and **Palantir** have seen significant upward revisions in revenue and EPS forecasts, reflecting strong AI-related demand [13][14]. - **CoreWeave's Performance**: CoreWeave reported revenue of **USD 1,365 million** for Q3, exceeding consensus but below estimates, with concerns about asset turnover and future guidance indicating potential revenue decline [18][19]. Market Dynamics - **AI Infrastructure Demand**: The demand for AI infrastructure and data workloads is solid, with companies like **Oracle and CoreWeave** aggressively scaling capacity [15]. - **Investor Sentiment**: There is a growing investor focus on how companies will deploy AI to solve business problems, with many still not fully recognizing the link between AI deployment and enterprise software [2]. Conclusion - The technology sector is on the brink of a significant transformation driven by AI, with 2026 expected to be a critical year for monetization and integration into enterprise workflows. Companies that are well-positioned in the software space are likely to capitalize on this trend, while challenges remain in the broader economic environment and enterprise budget constraints.

Group 1: Core Insights - The article presents a weekly roundup of the top 50 keywords in the AI sector, highlighting significant developments and trends in the industry [2]. - Key players mentioned include Google, Apple, ByteDance, NVIDIA, and OpenAI, indicating a competitive landscape in AI technology and applications [3][4]. Group 2: Chip Developments - Google is advancing its AI chip technology with the introduction of TorchTPU [3]. - Apple is focusing on AI server chips, which may enhance its capabilities in AI applications [3]. Group 3: Model Innovations - Google has launched the Gemini 3 Flash model, while ByteDance introduced Seed1.8, showcasing ongoing innovation in AI models [3]. - Other notable models include MiMo-V2-Flash from Xiaomi and Nemotron 3 from NVIDIA, indicating a diverse range of AI model developments [3]. Group 4: Application Trends - OpenAI is expanding its ecosystem with the ChatGPT application store and various applications like ChatGPT Images and SAM Audio [3][4]. - Companies like Tencent and xAI are also developing unique applications, such as the writing mode and Grok Voice, respectively [3][4]. Group 5: Technological Insights - The article discusses various technological insights, including AI memory systems and recursive self-improvement, which are critical for future AI advancements [4]. - The AI adult content market and AGI predictions are also highlighted, reflecting the broader implications of AI technology [4].

Core Viewpoint - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and robust balance sheets over low valuation multiples [1]. Group 1: Investment Philosophy - The company believes that not all low multiple stocks are cheap, and it seeks firms with steady long-term growth and no cyclicality [1]. - There is a recognition that investing in successful companies carries risks, particularly regarding valuation, but some opportunities may justify higher prices due to expansive growth potential [1]. Group 2: Company Focus - The analysis specifically mentions Zoom Video Communications (ZM) as a company with improved valuation and new growth vectors, leading to a buy recommendation [1].

Core Insights - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and robust balance sheets over low valuation multiples [1] Group 1: Investment Philosophy - The author disagrees with the notion that low multiple stocks are inherently cheap, advocating for a focus on companies with steady long-term growth and no cyclicality [1] - There is a recognition that investing in successful companies carries risks, particularly the risk of overpaying, which underscores the significance of valuation [1] - The article suggests that in certain situations, the potential for growth can outweigh immediate price concerns, indicating a broader perspective on investment timing [1]

Zoom brings its AI assistant to the web with access to free users https://t.co/ARjGn8ISfS ...

Company Performance - Zoom Communications (ZM) has seen a stock increase of 6.3% over the past month, reaching a new 52-week high of $91.43 [1] - Year-to-date, Zoom's stock has gained 9.7%, compared to a 25.5% gain for the Zacks Computer and Technology sector and a 7.5% return for the Zacks Internet - Software industry [1] Earnings and Revenue - Zoom has a strong record of positive earnings surprises, not missing earnings consensus estimates in the last four quarters. In the latest earnings report on November 24, 2025, Zoom reported EPS of $1.52 against a consensus estimate of $1.43 [2] - For the current fiscal year, Zoom is expected to post earnings of $5.94 per share on revenues of $4.85 billion, reflecting a 7.22% change in EPS and a 3.92% change in revenues. For the next fiscal year, earnings are projected at $5.93 per share on revenues of $5 billion, indicating a year-over-year change of -0.2% in EPS and 3.21% in revenues [3] Valuation Metrics - Zoom's current valuation metrics show a trading multiple of 15.1X current fiscal year EPS estimates, below the peer industry average of 29.2X. On a trailing cash flow basis, it trades at 20.8X compared to the peer group's average of 23.9X. The stock has a PEG ratio of 5.25, which does not place it among the top echelon of stocks from a value perspective [7] Zacks Rank and Style Scores - Zoom holds a Zacks Rank of 2 (Buy) due to a solid earnings estimate revision trend, meeting the criteria for investors looking for stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [8] - The company has a Value Score of C, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of B [6] Industry Comparison - The Internet - Software industry is positioned in the top 23% of all industries, indicating favorable conditions for both Zoom and its peer, 8x8 Inc (EGHT), which also has a Zacks Rank of 2 (Buy) [11]

Core Insights - Zoom Communications, Inc. has launched AI Companion 3.0, marking a significant evolution in its AI solutions aimed at enhancing personal workflows and collaboration [1][3] - The new version incorporates a federated AI approach, combining Zoom's proprietary models with third-party models from OpenAI and Anthropic, as well as open-source models like NVIDIA Nemotron [2] Product Features - AI Companion 3.0 introduces new capabilities for personal workflows (currently in beta) and agentic AI features for Zoom Docs, which will be available soon [1][5] - The conversational work surface allows users to transform meeting discussions into actionable insights and tasks without needing to upload transcripts or documents [6][10] - Enhanced features include automated task management, agentic retrieval capabilities, and a daily reflection report to summarize meetings and tasks [10] Market Positioning - The launch is positioned as a pivotal moment for Zoom, transitioning from a meeting-focused company to a leader in AI-driven intelligent work orchestration [3][8] - The company emphasizes democratizing access to AI, making advanced capabilities available to a broader range of users, including those on free-tier plans [4][8] Collaboration and Partnerships - Collaborations with companies like Oracle and NVIDIA are highlighted, showcasing how AI Companion 3.0 enhances productivity and collaboration within organizations [4][6] - The integration of NVIDIA's Nemotron models is noted for enabling advanced reasoning and retrieval-augmented generation within Zoom's AI framework [4] Accessibility and Pricing - AI Companion can be accessed via a desktop web browser, making it easier for users to engage with its features [4] - The standalone version of AI Companion is available for $10 per month, allowing users without a paid Zoom Workplace license to utilize its capabilities [4][5]