Zoom Communications (ZM) just made headlines at Zoomtopia 2025, unveiling AI Companion 3.0 and rolling out a suite of new artificial intelligence tools designed to reshape collaboration and productivity. From lifelike AI avatars to real-time translations and advanced meeting notes, this launch makes it clear that Zoom is sharply focused on integrating cutting-edge AI to enhance its platform. Zoom is also backing this technological leap with a substantial investment in AI education, underscoring its commitment to staying ahead of the curve and meeting evolving workplace demands.
This announcement comes after a strong stretch for the stock. Over the past month, shares have jumped nearly 15%, outpacing the broader market and many industry peers. Momentum has been building beyond just this single event, with Zoom consistently outperforming earnings expectations over the past year and reporting steady revenue growth. By introducing more advanced and accessible AI features, Zoom appears to be doubling down on the strategy that helped it transition from a pandemic necessity to a contender in enterprise communications.
With all these developments factoring into the recent run-up in share price, investors are left to wonder whether there is still an upside from here or if the market has already accounted for Zoom’s future growth.
Most Popular Narrative: 8.8% Undervalued
According to the most widely followed narrative, Zoom Communications is currently trading well below its estimated fair value, suggesting meaningful upside potential. This view is shaped by expectations of steady revenue growth, recurring income streams, and Zoom’s aggressive expansion in artificial intelligence offerings.
“Rapid product innovation in AI-driven automation, integration with third-party enterprise platforms, and workflow enhancements (such as custom AI Companions and agentless outbound dialers) strengthens Zoom’s differentiated value proposition in critical business processes. This enables pricing power and supports future margin expansion as value-added services scale without linear cost increases.”
Curious how Zoom could rewrite the story on market expectations? The real secret behind this bullish outlook is a bold strategy that focuses on future earnings, intensifying innovation, and a projected profit multiple worthy of industry giants. Want to understand why analysts believe there is more room to run and what breakthrough numbers are backing this call? Discover the pivotal calculations behind 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, increasing competition from integrated vendors and uncertain monetization of new AI features could pose challenges for Zoom’s future revenue and profit expansion.
Find out about the key risks to this Zoom Communications narrative.
Another View: Discounted Cash Flow
The SWS DCF model also points to Zoom Communications as undervalued, which supports the initial bullish outlook. While both methods agree for now, future shifts in growth or risk could alter the picture. The market will be watching.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Zoom Communications for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
Build Your Own Zoom Communications Narrative
If you see things differently or want a deeper dive into the numbers, you can build your own outlook in just a few minutes. 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.
Valuation is complex, but we’re here to simplify it.
Discover if Zoom Communications might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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