3 Stocks to Buy That Are Alternatives to Zoom Video Communications

Stocks to buy - 3 Stocks to Buy That Are Alternatives to Zoom Video Communications

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Zoom Video Communications (NASDAQ:ZM) was having a moment thanks to the novel coronavirus. Many companies scrambled to have employees work from home, while school classes moved online. Video conferencing is a key component of these setups, and Zoom was attractive because it was free and easy to use. And with adoption skyrocketing, ZM stock took off as well and was one of the best stocks to buy.

While most companies have seen their valuation plummet in 2020, Zoom experienced the opposite. On March 23, ZM closed at $159.56, for a whopping 135% gain to that point in 2020. However, that was when the wheels came off the bus. That rapid, wide scale adoption exposed severe security flaws. It turns out those Zoom video calls lack end-to-end encryption, user e-mails and photos were leaking and random strangers were “Zoombombing” video meetings.

Zoom has locked down feature development for 90 days while it works on security fixes, but the damage has been done to Zoom stock, which now trades around $116. Now, the search is on for alternatives that offer a more secure experience.

That said, there are three companies offering popular video meeting solutions that feature enterprise-grade security:

  • Microsoft (NASDAQ:MSFT)
  • Cisco Systems (NASDAQ:CSCO)

Here’s why Microsoft’s Skype, Cisco’s Webex and Google’s Hangouts Meet are a better option for work from home video meetings than Zoom.

Stocks to Buy: Microsoft (MSFT)

Stocks to Buy: Microsoft (MSFT)
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Microsoft bought Skype in 2011 for $8.5 billion. However, the video chat application has actually been around since 2003. That’s a lot of time to develop features — including group video conferencing.

Skype’s “Meet Now” feature supports video meetings, and participants can join for free. Skype includes other work from home-friendly features, including the option of a blurred background along with the ability to share screens to view files and presentations.

Microsoft says Skype-to-Skype video conferences use end-to-end encryption, including for screen sharing, messages, video and file transfers.

At the end of March, Microsoft reported that with the coronavirus lockdown in full effect, Skype was seeing 40 million daily active users, a 70% increase.

Cisco (CSCO)

Stocks to Buy: Cisco (CSCO)
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Webex has been in business for more than two decades, and Cisco has owned it since 2007.

The company offers a free version of Webex that has been upgraded in capability since the start of the coronavirus pandemic. The free version of Webex includes video conferencing, screen and file sharing and interactive whiteboards for collaboration. Cisco has upped the maximum number of participants from 50 to 100, made maximum meeting length unlimited (from the standard 40 minutes), and included support for call-in audio.

Cisco says all Webex meetings are secure by end-to-end encryption, including messages, documents, and whiteboard content.

Alphabet (GOOG, GOOGL)

Stocks to Buy: Alphabet (GOOG, GOOGL)
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Google’s Hangouts is still available for video chatting with 10 or fewer people. However, the company has been pushing Google Hangouts Meet, part of its G Suite, as being more appropriate for corporate customers. Hangouts Meet can support up to 100 participants, joining via video or audio.

Hangouts Meet is a secure video conferencing solution that runs in a browser. So there’s no software to install, although mobile users are instructed to use the app for a superior experience. The video meeting is encrypted in transit, and meeting invites use a 10-character code which makes it difficult for potential hackers to gain access. Two-step verification is also supported for additional security.

In addition, Google says Hangouts Meet is compatible with other enterprise-grade video meeting solutions, including Skype.  

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.  As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/04/3-stocks-to-buy-that-are-alternatives-to-zoom-video-communications/.

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