ZM (Zoom Communications, Inc.): Themes, ETFs, and Basket Ideas
Last updated June 2026
Short answer
What does Zoom Communications, Inc. do?
Zoom Communications is a cloud communications company best known for its video-conferencing platform, which became a household name during the pandemic. Its core product lets people host video meetings, webinars, and calls reliably across devices, and the business sells subscriptions to individuals, small businesses, and large enterprises. Since the pandemic boom faded, Zoom has worked to evolve from a single video-meeting product into a broader unified-communications and workplace platform: Zoom Phone (cloud telephony), Zoom Contact Center, Team Chat, Zoom Rooms for hybrid offices, Zoom Docs and Whiteboard, and an expanding suite of AI features branded Zoom AI Companion. Most revenue still comes from meeting subscriptions, but management is pushing the higher-growth phone, contact-center, and AI products to re-accelerate growth and deepen enterprise relationships. Founded in 2011 and headquartered in San Jose, California, Zoom holds a large net cash position and competes against Microsoft Teams, Google, and Cisco in a crowded communications market.
Where is Zoom Communications, Inc. heading?
1. Platform expansion beyond meetings.
Zoom is broadening from video meetings into a full communications platform: Zoom Phone (cloud telephony), Contact Center, Team Chat, and collaboration tools. These newer products grow faster than the mature meetings business, expand the addressable market, lift revenue per customer, and make Zoom stickier in the enterprise as it bundles more of the workplace-communications stack.
2. AI Companion and monetization.
Zoom is embedding AI across meetings, chat, phone, and docs through AI Companion (meeting summaries, drafting, agents), much of it included to drive adoption with paid premium tiers to follow. AI gives Zoom a way to differentiate against bundled rivals, increase engagement, and potentially open a new monetization layer on top of its large user base.
3. Strong balance sheet and cash generation.
Zoom is highly profitable on a non-GAAP basis, generates substantial free cash flow, and holds a large net cash position with no meaningful debt. This funds aggressive share buybacks that shrink the share count, supports continued product investment, and provides downside protection, a notably solid financial footing for a company in a competitive market.
Risks worth tracking: Zoom's central challenge is growth: after the pandemic surge, revenue growth slowed to low single digits as the core meetings market matured and online (small-business) churn rose. The dominant risk is Microsoft Teams, which is bundled for free or near-free with Microsoft 365 across most enterprises, plus Google Meet and Cisco Webex, making it hard for Zoom to win and retain seats without price pressure. AI is as much a threat as an opportunity if rivals' bundled AI proves good enough. The new products (Phone, Contact Center) must scale meaningfully to offset slowing meetings growth, which is not assured. Investors debate whether Zoom is a durable platform or a single-product utility facing commoditization, and the muted multiple reflects that uncertainty.
Earnings and valuation (approximate, early 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Zoom Communications, Inc.'s investor relations page or your broker.
- Revenue (TTM): ~$4.7 billion
- Revenue growth: low single digits
- Non-GAAP operating margin: ~38-40%
- Free cash flow: ~$1.5 billion annually
- Net cash position: ~$7-8 billion (no meaningful debt)
- Enterprise net retention: ~98-100%
- P/E (non-GAAP): ~13-15x
- Market cap: ~$22-25 billion
Zoom trades at a modest multiple for a profitable software company, reflecting slow top-line growth and competitive pressure from Microsoft despite high margins, strong free cash flow, and a large net cash pile. A meaningful share of the market cap is cash. Investors weigh the cheap valuation and buybacks against the risk that growth stays muted and meetings commoditize.
ZM's competitors
Video and meetings
Competes with Microsoft Teams (bundled with Microsoft 365), Google Meet, and Cisco Webex for video meetings and webinars, where bundling and incumbency are major competitive forces.
Cloud telephony and UCaaS
Zoom Phone competes with RingCentral, 8x8, Microsoft Teams Phone, and Cisco in cloud-based business phone and unified communications.
Contact center and collaboration
Zoom Contact Center competes with Five9, NICE, Genesys, and Amazon Connect, while Team Chat, Docs, and Whiteboard compete with Slack, Microsoft, and Google collaboration tools.
Using ZM in a Walnut basket
The most useful question to ask about a single stock is rarely “will it go up?”. It's “does this fit a thesis I actually believe in, and how do I size it alongside other stocks that fit the same thesis?” That's what Walnut is built for.
Open the AI assistant on Walnut and describe a thesis (for example: “the AI infrastructure buildout”, “dividend growth large-caps”, “global semiconductors”) where ZM would naturally fit. The AI proposes 5 to 6 constituents with target weights, you review, and you can fund the basket through your broker once you're ready.
Build a basket around ZM with Walnut
Use Zoom Communications, Inc. as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What is Zoom's ticker symbol?
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ZM, listed on Nasdaq. Officially Zoom Communications, Inc. (formerly Zoom Video Communications), founded in 2011 and headquartered in San Jose, California. It trades during US market hours and is available at every major US brokerage.
What does Zoom do?
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Zoom provides cloud communications software, best known for its video-conferencing platform. It also offers Zoom Phone (cloud telephony), Contact Center, Team Chat, Rooms, collaboration tools, and AI features, selling subscriptions to individuals, small businesses, and enterprises.
Who are Zoom's main competitors?
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Microsoft Teams (bundled with Microsoft 365), Google Meet, and Cisco Webex in video meetings. RingCentral, 8x8, and Microsoft in cloud phone. Five9, NICE, and Genesys in contact center. Slack and Microsoft in team collaboration.
Is Zoom still growing?
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Slowly. After the pandemic surge, Zoom's revenue growth fell to low single digits as the core meetings market matured. Growth now depends on newer products like Zoom Phone, Contact Center, and AI features scaling enough to offset the mature meetings business.
How does Microsoft Teams affect Zoom?
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Teams is bundled for free or near-free with Microsoft 365, which most enterprises already pay for, making it a powerful competitor. This bundling pressures Zoom's ability to win and keep seats without discounting, and is the single biggest competitive risk investors cite.
What is Zoom AI Companion?
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AI Companion is Zoom's suite of AI features across meetings, chat, phone, and docs, including meeting summaries, drafting help, and AI agents. Much of it is included to drive adoption, with premium paid tiers as a potential new monetization layer and a way to differentiate from rivals.
Is Zoom profitable?
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Yes, very much so on a non-GAAP basis, with operating margins near 40% and substantial free cash flow. GAAP results include stock-based compensation, but Zoom is solidly profitable and cash-generative, which is unusual for a company with such slow growth.
Does Zoom have a lot of cash?
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Yes. Zoom holds a large net cash position of roughly $7-8 billion with no meaningful debt, a significant portion of its market cap. It uses that cash and its free cash flow for aggressive share buybacks and product investment.
Is Zoom a cheap stock?
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On a non-GAAP earnings basis, Zoom trades at a modest multiple for a profitable software company, and a large share of its market cap is cash. The low multiple reflects slow growth and competitive concerns rather than a quality problem, which is why it screens as inexpensive.
Which thematic baskets typically include Zoom?
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Cloud software and communications baskets, value-software or cash-rich-tech themes, and occasionally AI-software baskets given AI Companion. It can also appear in hybrid-work or collaboration-tech themes.
What is Zoom's market cap?
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Approximately $22-25 billion as of early 2026, well below its pandemic peak. A meaningful portion of that value is the company's net cash, with the operating business valued at a modest multiple of its free cash flow.
Is Zoom a good stock to buy?
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Descriptive, not a recommendation. The bull case rests on platform expansion (Phone, Contact Center), AI monetization, high margins, strong free cash flow, and a large cash pile funding buybacks, while the bear case cites slow growth, Microsoft Teams bundling, and meetings commoditization. Whether it fits a portfolio depends on an investor's goals and risk tolerance. Walnut is informational, not investment advice.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with Zoom Communications, Inc.'s investor relations page or your broker before making investment decisions.