Recently Ark Invest said they think Zoom could rise to $1,500 per share by 2026. Currently, Zoom’s price is $78.68, meaning they anticipate 20x returns over the next four years.
I would be reluctant to say I knew when this bear market was going to end. Predictions like that don’t really understand how the technicals in the market work. We don’t know when this bear market is going to end. Those who understand technicals know that we are in a downtrend in general and that currently, we are looking at a potential rise in the market. But that rise is only expected to be temporary and we have no idea when the bear market will end. That said, what Cathie Wood is good at is analyzing companies. We agree that Zoom has lots of potential upside from here.
Recently, Jim Cramer came out as bearish on Zoom stock. I disagree with Jim on this one. Zoom’s main competitor over the next decade is likely to be Cisco. You could argue that Zoom is already a bigger name than Cisco. During the pandemic I’ve heard many people who are not techies use the word Zoom and yet nobody says Cisco. Many people might be surprised to see then that Cisco has a market cap of 177.87 billion dollars today. Zoom on the other hand has a current market cap of 23.87 billion. It won’t be easy to take away from Cisco’s earnings because some of it comes from the public sector. I know many governments use Cisco’s Webex instead of Zoom in their legal court systems. And while that could change, I wouldn’t expect it to unless there was a good reason. If judges don’t have a problem with Webex, they won’t switch to Zoom for the sake of it. Nevertheless, it would be foolish to suggest that Zoom’s market cap is currently high at 23 billion. It sounds high but when compared to its competition it’s actually very attractively priced. No one knows where Zoom will be in 10 years, but its current price is an attractive gamble for potentially big returns.
Interestingly, Cisco has hit a multiple bottom recently — a sign that its stock has stabilized and may have bottomed. This only makes Zoom more attractive even if its own stock doesn’t present a multiple bottom pattern at the moment.
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