Zoom Communications’ (NASDAQ:ZM) shares surged by more than 11 percent on Friday, after the software company reported second-quarter earnings that were better than expected and increased its outlook for full year.
A stock which has been down for the year to date received some relief from the positive earnings, driven by enterprise growth and artificial intelligence advances.
Stock surged 11.32 percent to an intraday high $81.46. The stock price was $81.15 at the time this article was written.
The stock has gained the most since August 22, 2020, when it added 12.97%.
Strong quarterly results exceed expectations
Zoom’s second fiscal quarter of 2026 saw adjusted earnings per share of $1.53 and revenue of $1.2 billion. This was higher than analyst estimates of $1.37 per shares and $1.20 Billion.
The revenue increased by nearly 5% over the previous year, with most of it coming from enterprise sales.
Online revenue has grown 1.4%, to $486.6 million. Enterprise revenue increased by 7%.
This is a 9 percent increase over the previous year. The company reports 4,274 clients who generated more than $100,000 of revenue in the 12-month trailing period.
Eric Yuan, Zoom’s founder and CEO, highlighted Zoom’s role in using AI to increase workplace efficiency.
Yuan stated that “AI has transformed the way people work, and Zoom leads the charge in driving innovations to help customers get more done and reduce costs while delivering better customer and employee experiences.”
Full-Year Guidance Updated
Zoom has raised its forecast for adjusted full-year earnings per share to an estimated range between $5.81 and $5.84. This is up from the previous $5.56 to 5.59.
The revenue is expected to be between $4.825 and $4.835 Billion, as opposed to the earlier guidance that was $4.800 to $4.810 Billion.
Zoom’s shares have fallen by 0.23% since 2025, despite the positive outlook.
As growth has slowed from the highs of pandemic era, pressure on the company is increasing. Competition in video conferencing software and other collaboration tools remains fierce.
Mixed Analyst Reactions
Wall Street analysts welcomed Zoom’s stronger quarter, but were divided over its longer-term trajectory.
Matthew Harrigan, an analyst at Benchmark Research Group, reiterated his Buy rating with a $102 target price. He cited the demand for Zoom’s AI-powered capabilities.
Zoom’s video conferencing and contact center solutions are being enhanced with AI, he said, resulting in cost-savings for its clients.
Cantor’s Thomas Blakey kept a Neutral Rating with a $87 price target, while praising both the quarter’s strong performance and revised guidance. He did not make a bullish prediction, however.
Some were cautious. Jackson Ader, KeyBanc Capital Markets, argued that the upgrade to guidance was not as impressive as it seemed. He noted that Zoom’s Q2 revenue beat was only $9 million higher.
He said that implied the second-half forecast for the company was in fact weaker. KeyBanc kept its Underweight rating, and reduced the target price from $73 to $69.
Ader wrote: “Considering how optimistic the comments and characterizations of the outlook were, a cut in the second half just did not seem to be the right solution.”
The post Zoom Shares Surge 11% After Earnings Beat and Upgraded Outlook may be updated as new developments unfold.
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