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Why Zoom Stock Jumped Sharply on Friday

The Motley Fool logo The Motley Fool 6/11/2021 Daniel Sparks
Why Zoom Stock Jumped Sharply on Friday © Provided by The Motley Fool Why Zoom Stock Jumped Sharply on Friday

What happened

Shares of Zoom Video Communications (NASDAQ: ZM) jumped sharply on Friday. The stock was up 5.1% as of 2:45 p.m. EDT.

Shares of the live video collaboration software provider were likely up because of a bullish note from an analyst, as well as an upbeat day in the market for many tech stocks.

A hand in a business suit draws a red upward arrow above two flat arrows. © Getty Images A hand in a business suit draws a red upward arrow above two flat arrows.

So what

RBC Capital analyst Rishi Jaluria named Zoom Video his top stock pick on Friday, giving shares a 12-month price target of $450.

The analyst believes that the company will remain integral to businesses in a post-pandemic world, thanks to differentiated technology. Jaluria is also optimistic about the company because of its strong financials. 


Video: Why This Analyst Is Picking Salesforce Over Zoom (TheStreet)

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Bullishness for tech stocks (particularly growth tech stocks like Zoom) on Friday may have helped give the stock a boost as well.

Now what

Zoom crushed analyst estimates when it recently reported results for its fiscal first quarter, a three-month period that ended on April 30. Revenue during the quarter skyrocketed 191% year over year to $956 million. Net income for the period was $227 million.

Based on the company's outlook for full fiscal year revenue to be nearly $4 billion, Zoom management is undoubtedly confident about the company's prospects as the economy reopens.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

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