Zoom (NYSE:ZM) has a powerful new ally. Cathie Wood thinks the video communications platform has the potential to far exceed its 2020 peak. In fact, Wood sees it hitting $1,500 per share by 2026, more than 13 times the current ZM stock price.
This call may seem aggressive to some, but Cathie Wood’s track record speaks for itself. The acclaimed investor has been on a buying spree lately, often with a focus on beaten-down names. She has also been bullish on Zoom for a long time.
This year hasn’t been easy for Zoom. Shares have shed more than 40% over the past six months as workers return to the office and companies purge remote work expenses. However, ZM stock has risen recently — 15% for the past one month. The company ended May on a high note after beating earnings expectations for the first quarter of 2022.
Today, shares closed down 3.4%. Let’s take a closer look at why Wood thinks ZM stock is headed for a turnaround.
What’s Happening with ZM Stock?
Zoom is probably most closely associated with the early lockdown days of the pandemic. While markets tanked, ZM spiked alongside Peloton (NASDAQ:PTON) and Shopify (NYSE:SHOP). As remote work culture has shifted, though, shares have faced turbulence.
Investors are questioning Zoom’s long-term growth prospects. But Cathie Wood sees a massive bull run in its future. Even her bearish case “points to a stock price of $700.” That’s a gain of more than six times the current price.
Published yesterday, ARK Invest’s bull thesis for ZM stock argues the following:
“We believe current pivots back to in-office mandates could be part of a trial-and-error process for employers that will increase the percent of workers in hybrid/remote working models during the next five years. In our mean projection, we expect 75% of all global knowledge workers to participate in such arrangements, up from 51% in 2021.”
Multiple CEOs — including Tesla (NASDAQ:TSLA) CEO Elon Musk — have called for workers to return to the office. But Wood’s bullish case effectively denies that things are so black and white.
Ironically, TSLA stock is another one of Cathie Wood’s top holdings. Tesla was recently beat out for the top position in the ARK Innovation ETF (NYSEARCA:ARKK), however — by none other than ZM stock. The exchange-traded fund bought another 100,000 shares of Zoom in May.
What It Means
ZM stock has seen its fair share of bearish energy lately. But a vote of confidence from someone like Cathie Wood could be exactly the jumpstart it needs. Even if the stock doesn’t reach her highly bullish price target, hitting $7oo per share would still be a significant gain for investors.
Wood isn’t the only one predicting a bullish future for ZM stock, either. InvestorPlace contributor Nicolas Chahine recently touted Zoom’s potential for long-term growth, predicting at least 50% upside.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
