Back during the pandemic, when videoconferencing was the only legal way to see friends, family, or coworkers, Zoom (NASDAQ:ZM) flourished. Now that the restrictions are largely out the door and the calls to return to the office are also hitting a crescendo, Zoom is falling by the wayside. As a result, Zoom is joining a growing lineup of tech companies that are thinning their rosters. That was enough for investors to give Zoom a fractional boost in Thursday afternoon’s trading.
If this news sounds familiar, then you likely remember last February when Zoom announced it was dropping 15% of its workforce around an increasing uncertainty in the economy. The uncertainty hasn’t improved much, but apparently, Zoom was close to where it needed to be headcount-wise, as this time, it’s only letting go of 2% of the workforce. Zoom also revealed that the cuts weren’t universal, and it’s actually still on pace to hire in several fields, including sales, product development, and—not surprisingly—artificial intelligence.
Development Already in Progress
As it turns out, Zoom’s AI development is already bearing fruit. Its new AI Companion system is said to not only improve collaborative efforts but also measure adoption levels and even provide support for contact center operations. With early testing already finding that those who use AI are saving about an hour of work a day or more, there’s clearly a reason to put these tools in place. Further, Zoom is also poised to work with the new Apple (NASDAQ:AAPL) Vision Pro system, as those using Zoom in connection with the headset will be able to represent themselves as a three-dimensional avatar rather than as a face on a screen.
Is Zoom a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ZM stock based on six Buys, 17 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 22.01% loss in its share price over the past year, the average ZM price target of $77.53 per share implies 20% upside potential.
