Zoom (NASDAQ:ZM) took a hit in early trading, sinking nearly 8% at 10.36am, after posting a quarter that was solid on the surface but left investors wanting more. Revenue came in at $1.18 billion, up 3.3% year-over-year, with enterprise sales leading the charge. Operating cash flow jumped 21.7% to nearly $1.95 billion, and margins continued to expand. Sounds good, right? Not quite. The problem? Zoom's fiscal 2026 outlook underwhelmed, with projected revenue growth of just 3.1% in constant currencyfalling short of what Wall Street wanted to see. Investors weren't thrilled, and the stock paid the price.
Analysts weren't exactly jumping to Zoom's defense either. BofA Securities and J.P. Morgan stuck with neutral ratings, flagging sluggish revenue growth as a sticking point. Stifel went a step further, cutting its price target from $90 to $85, acknowledging Zoom's progress in AI-powered tools like Contact Center and Workvivo but stressing that meaningful growth acceleration still feels out of reach. Sure, AI monetization could eventually move the needle, but without a clear catalyst, investors are hesitant to bet big. Zoom's strong free cash flow is a plus, but heavy stock-based compensation continues to dilute the upside.
And it's not just Zoom feeling the heat. Competitors like Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), and Salesforce (NYSE:CRM) were all down slightly in early trading, reflecting broader market skepticism around enterprise software demand. The real question: Can Zoom break out of this slow-growth narrative? It needs a sparkwhether it's a major AI-driven revenue stream or an acceleration in enterprise adoption. Until then, the stock might be stuck in neutral, waiting for a reason to climb.
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