Zoom (ZM) Surges 15.83% on Q3 Earnings, AI-Driven Revenue Growth

The share price rose to its highest level so far this month, with an intraday gain of 15.83%.

Zoom Communications (ZM) drove its stock to a new peak amid strong third-quarter fiscal 2026 results, driven by AI integration and revenue growth. The company reported $1.23 billion in revenue, a 4% year-over-year increase, exceeding estimates. A key catalyst was the AI Companion tool, which saw fourfold usage growth YoY and featured in 90% of top deals in the Customer Experience segment. Strategic product launches, including Zoom Phone and Workvivo, also contributed to enterprise revenue growth of 6.1%, outpacing market forecasts. Analysts highlighted the AI monetization strategy as critical for sustaining growth amid potential subscription declines.

Investor sentiment was further bolstered by Zoom’s $1 billion share buyback authorization and improved operational efficiency, including a 34.2-day reduction in days sales outstanding. The company raised full-year revenue guidance to $4.85–$4.86 billion and adjusted EPS to $5.95–$5.97, reflecting confidence in AI-driven expansion. However, analysts remain divided on long-term sustainability, with some cautioning about competitive pressures from platforms like Microsoft Teams and challenges in scaling AI monetization. Despite short-term gains, mixed ratings and market saturation risks suggest volatility may persist as Zoom navigates its pivot to an AI-first platform in a crowded hybrid work landscape.