Is Zoom Here to Stay? Why You Should and Shouldn’t Consider Investing

Disclaimer: This post does not constitute financial advice. Author has no position in Zoom (ZM). Do your own due diligence before making an investment.

Zoom has dominated the market of videocalls in both business and social spheres. Due to its undeniable ease, functionality, and frictionless movement between platforms, it went to the forefront of the video-calling sector.

While the stock (ZM) may be overvalued at the moment ($384.53), Zoom will probably remain prevalent in our lives for years to come. Some believe this video-calling phase is just that, a phase.

But several companies have suggested working from home for longer than is necessary to stay safe from the global pandemic. Companies are using Zoom to connect both nationally and internationally, which saves money and time. Less time spent travelling means more time working, as well as less travel expenses. If people are able to work from home, the company doesn’t have to shell out tons of money for a grand office building. On the other hand, there are great pros to working in the office together. Dealing with clients and coworkers face to face can add that extra personal touch you can’t achieve through a screen. This is why for some businesses, it will be important to remain in person with offices. For others, however, Zoom will stay at large.

Zoom has many competitors, which is one of the worries regarding its longevity. There is Microsoft’s Skype, Google Hangouts, and Facebook to compete with. These powerhouses have loads of capital they can use to get ahead, but they didn’t focus fast enough. The reason Zoom got to the forefront was because it was so frictionless and user friendly. They cut out the step where you have to sign up for a Zoom account to join. All you have to do is click a link and you’re in. Computer or phone. It seems like it wouldn’t be a big deal, but in the technological sphere the slightest edge can cut out the competitors. With the older generation using new software, simplicity is key. Having one bad experience with Skype can make a user never want to return. Thus, Zoom became a hot commodity in the stock world, as well as the missing-your-friends-world.

Zoom stock will most likely lower once COVID-19 is over, because it will lose its social market. While it will still be used occasionally for long-distance friendships, most people use Facebook or Facetime for social purposes. Therefore, it won’t lose all it’s business from social gatherings, because it didn’t have the whole market to begin with.

It’s gone through some troubles with the Chinese government recently, which leaves it open for legal trouble. The charges are that a China-based excetive agreed to stop the Zoom calls of people commemorating the 1989 Tiananmen Square Massacre. Thus, its ethics may be a bit shaky if you’re looking for a moral company.

There are many risks and rewards associated with investing in Zoom. It appears to have the longevity that will keep it around after COVID-19 is done. However, with extreme competition, it is subject to losing market share if they stop innovating.

Zoom is the most user-friendly, frictionless company of its kind, which is what made them so popular in the first place. The stock will most likely lose some of its outrageous status post-COVID-19, but probably not all of it.

It seems to have the potential to remain in the tech sphere for more than a hot second.