ZM Stock Pops Pre-Market On Fresh Wall Street Backing: Jefferies Hikes Target On AI Momentum

• Jefferies also maintains a ‘Buy’ rating and highlights stronger growth trends, buybacks and improving AI momentum.
• KeyBanc upgraded Zoom to Sector Weight from Underweight, citing better-than-expected results, margin expansion and continued capital returns.
• Zoom beat Q1 estimates, raised full-year guidance and authorized a $1-billion buyback.

Shares of Zoom Communications surged over 15% in pre-market trading on Friday after the video conferencing platform drew positive analyst attention from Jefferies and KeyBanc.

Wall Street Turns Bullish On Zoom

Jefferies has raised its price target on Zoom Communications to $118 from $105 and maintained a ‘Buy’ rating on the stock, following what it described as a solid fiscal Q1 performance.

The investment firm said Zoom’s improving growth trajectory, stronger execution, and expanding share buybacks are all supportive of the stock’s valuation. Jefferies also added in a research report that Zoom’s AI story is resonating, and its improving growth and growing buybacks should support the shares.

Separately, KeyBanc upgraded Zoom Communications to ‘Sector Weight’ from ‘Underweight’ following the company’s quarterly results.

The brokerage said Zoom outperformed expectations on several fronts, including better margin expansion, more stable performance across both enterprise and mid-market segments, and continued capital return to shareholders.

KeyBanc also pointed to strategic investments, including Zoom’s involvement with AI firm Anthropic, calling it a “timely investment in a financial rocket ship,” according to the analyst note.

ZM Reports Strong Earnings Beat, Raised Guidance

Zoom reported first-quarter results on Thursday that beat analyst estimates and lifted its full-year outlook.

Revenue for the quarter came in at $1.24 billion, up 5.5% year-over-year, while adjusted earnings rose to $1.55 per share, compared to $1.43 a year earlier.

For the full year, Zoom now expects adjusted earnings of $5.96 to $6.00 per share on revenue of $5.08 billion to $5.09 billion. The company also authorized a $1 billion share buyback program.

ZM Stock: Stocktwits Retail Sentiment Turns ‘Extremely Bullish’

On Stocktwits, retail sentiment turned “extremely bullish” from “neutral” a day ago. Message volume also surged, turning “extremely high” from “low” the previous day.

ZM stock is up over 15% in the past 12 months.

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