Zoom Communications shares climbed about 12% on Friday, reaching a fresh 52-week high after the company boosted its fiscal 2027 guidance and expanded its share repurchase program. The stock was last trading near $108, up from Thursday's close of $96.75.
Investors are increasingly focused on whether Zoom can demonstrate growth beyond its core video conferencing business. The company is repositioning itself as a broader workplace platform powered by artificial intelligence. Its AI tools can summarize meetings, search across work information, and automate follow-up tasks.
The broader market also rose on Friday, with the S&P 500 and Nasdaq each gaining about 0.6%, while the Dow Jones Industrial Average hit an intraday record. Investors monitored U.S.-Iran talks and looked ahead to the Memorial Day weekend.
For the quarter ended April 30, Zoom reported revenue of $1.239 billion, up 5.5% from the same period last year. Enterprise revenue increased 7.2% to $755.7 million, while adjusted earnings per share came in at $1.55. CEO Eric Yuan highlighted the company's "continued momentum" and its focus on "turning AI innovation into durable growth."
Zoom's paid monthly active users for AI Companion surged 184% year-over-year. My Notes, Zoom's AI note-taking tool, reached over 1.5 million monthly active users (excluding trial accounts) in under four months since its launch.
The company is pushing to secure larger enterprise contracts as it competes with rivals embedded in existing systems. In prepared remarks, Zoom highlighted a government contractor that switched back to its Workplace, Phone, Events, and Webinars platform, securing a seven-figure recurring annual deal. That win replaced Microsoft Teams and Cisco Calling.
Zoom now projects fiscal 2027 revenue of $5.08 billion to $5.09 billion, with adjusted EPS between $5.96 and $6.00. The company also authorized an additional $1 billion in share buybacks. Buybacks can boost EPS by reducing the share count, but they do not directly increase product demand.
Analyst opinions were mixed. Benzinga data showed a neutral consensus rating and an average price target of $100.72, below Friday's trading level. Rosenblatt set the highest target at $130, while Cantor Fitzgerald maintained a neutral rating and a $104 price target.
The rally is not without risks. Zoom issued second-quarter adjusted EPS guidance of $1.45 to $1.47, slightly below the $1.48 analyst consensus. Revenue guidance of $1.265 billion to $1.270 billion matched expectations, according to LSEG data cited by Reuters. The company cited risk factors including AI adoption, increased competition, macroeconomic changes, and longer sales cycles for large clients.
Investors are seeking evidence that Zoom's AI products are being actively used, not just announced. The key question is whether that usage will drive larger customers to increase spending over time, rather than simply allowing Zoom to retain existing business.
