The days of virtual happy hours are long past now that most of the world has moved on from COVID-19 lockdowns. Zoom Video Communications Inc. is still paying the price in its income statement and in the stock market.
“Even if the company guided to more profitability in a more macro constrained environment, a more conservative top-line outlook could cause the name to trade off in the near term,” Meta Marshall, an analyst at Morgan Stanley, wrote in a research note. Analysts predict that sales increased 9 per cent in the second quarter, down from 12 per cent in the first. For this year and the next two, they estimate 11 per cent to 13 per cent growth, a far cry from the 300 per cent-plus annual surge during the peak of the pandemic.
“Zoom has shifted its focus to the enterprise segment for growth, where I don’t think their strong brand name will help them as much as it did in the consumer online market,” Butler said. “There’s so much competition here now,” said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading. Everyone’s asking, “the earnings are OK here at Zoom, but are they sustainable?”Amazon.com Inc. is closing in on Alphabet Inc.’s market capitalization. The e-commerce giant slipped behind Google’s owner in July last year and now ranks fourth in size, behind Apple Inc., Microsoft Corp. and Alphabet.
Some of Asia’s biggest funds more than doubled their positions in Alibaba Group Holding Ltd. and Sea Ltd. in the second quarter after a year-long rout.