Zoom Video Stock Soars As Company Issues Upbeat Earnings Guidance—Watch This Key Level

Zoom Video (ZM) shares jumped more than 10% in extended-hours trading on Monday after the company topped analysts’ quarterly estimates and issued better-than-expected current-quarter and full-year earnings guidance amid growing demand for its expanding AI-enhanced product range.

The company, which rose to prominence during the pandemic for its video conferencing software, disclosed fiscal fourth-quarter adjusted earnings of $1.22 per share on revenue of $1.15 billion. Wall Street had expected earnings of $1.15 a share on sales of $1.13 billion.

Looking ahead to the the current quarter, the San Jose, California-based company projects adjusted earnings per share to range between $1.18 and $1.20, with the lower end of that forecast comfortably topping analysts’ expectations of $1.13 a share. However, guided revenue for the period of $1.125 billion represents growth of less than 2% from the prior year and comes in slightly below the $1.13 billion consensus view.

For the full fiscal year, Zoom provided adjusted earnings guidance of $4.85 to $4.88 per share on revenue of $4.60 billion compared to analysts’ expectations of $4.71 per share in earnings on revenue of $4.65 billion.

Zoom, which launched its generative artificial intelligence (AI) digital assistant AI Companion in September last year, said it remains focused on rolling out the technology across its suite of products. “We’re committed to democratizing AI accessibility, offering it to all our customers regardless of business size, included at no extra charge with a paid license,” Zoom founder and CEO Eric Yuan said in the company’s earnings statement.

In a post earnings call, Yuan told analysts that the video conference software maker plans to expand its AI-related product range this year. “We are also going to build new services and are driven by Zoom AI companion, this year we are going to double down on Zoom AI customization and also focus on monetization,” he said.

The company also authorized a buyback of up to $1.5 billion of its outstanding Class A common shares.

ZM shares have oscillated roughly within a 14-point trading range over the past 10 months, helping to establish clear support and resistance levels on the chart. More recently, the price has bounced from the pattern’s lower trendline on increased volume leading into the company’s earnings release. Amid further upside, monitor the range’s top trendline around $74.50 as a potential area of resistance.

The stock gained 10.4% to $69.68 in after-hours trading Monday.

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As of the date this article was written, the author does not own any of the above securities.