Zoom (ZM) Stock Rises 6.2% — What’s Driving the Software Rally?

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TLDR

  • On March 4, Zoom stock closed with a 6.2% gain at $78.06, propelled by a broader rally in the software sector.
  • The software ETF (IGV) outperformed the Nasdaq by 9% in the previous week.
  • Morgan Stanley pointed out a shift in investor focus towards software companies providing practical AI solutions.
  • Varenne Capital Partners established a new position worth $1.56 million in ZM during Q3.
  • Institutional ownership amounts to 66.54%, yet insiders have been net sellers, unloading 183,089 shares in the past 90 days.

Zoom stock registered a 6.2% increase on March 4, closing at $78.06, as a buying wave swept through the software sector.

ZM Stock Card

This movement wasn’t driven by any Zoom-specific news. It was part of a broader rotation into software stocks.

The broader software ETF (IGV) outperformed the Nasdaq by 9% in the week before. Such outperformance tends to draw along underperforming names like Zoom.

indicated a shift in investor thinking. Instead of broadly betting on AI hype, investors seem to be zeroing in on software companies that offer practical and secure solutions for enterprise customers.

The firm noted that AI adoption in business is concentrating on specific use cases – software development and information retrieval – suggesting a more mature investment landscape.

For Zoom, the bounce occurred just six days after a painful 13.3% drop. That selloff followed Q4 earnings that disappointed in terms of the bottom line.

Fourth-quarter revenue came in at $1.25 billion, exceeding estimates of $1.23 billion. But adjusted EPS of $1.44 missed the $1.48 consensus. Full-year EPS guidance also came in below Wall Street expectations.

The stock is still down 6.3% year-to-date and is 18.9% below its 52-week high of $96.22, reached in January 2026.

Institutional Buying Picks Up

Varenne Capital Partners opened a new position in ZM during Q3, purchasing 18,848 shares worth approximately $1.56 million. It now ranks as the fund’s 21st largest holding.

Norges Bank made a much larger move, acquiring a new position worth around $540 million in Q2. Vanguard increased its stake by 4% in Q3, bringing its total to approximately 25.94 million shares. Pacer Advisors grew its position by 54.4% in the same period.

Overall, institutional investors currently hold 66.54% of the outstanding stock.

Insiders Moving the Other Way

While institutions have been buying, insiders have been selling. In the last 90 days, insiders sold 183,089 shares worth roughly $15.75 million.

CEO Eric Yuan sold 73,378 shares on December 16 at an average price of $87.29, netting around $6.4 million. Insider Velchamy Sankarlingam sold 7,568 shares on January 12 at $86.55.

Insiders currently hold 10.78% of the company.

Analyst sentiment is mixed. Out of 27 analysts tracked by MarketBeat, 14 rate ZM a Buy, 12 a Hold, and one a Sell. The average price target stands at $95.32.

Wedbush maintains an Outperform rating with a $95 target. Jefferies has a Buy rating and a $105 target. Wolfe Research upgraded ZM to Outperform in February with a $115 target. Cantor Fitzgerald remains neutral at $87.

ZM’s 50-day moving average is $87.01. Its 12-month low is $64.41. The company has a market cap of $21.76 billion and a PE ratio of 11.85.

For FY2027, management guided EPS of $5.77–$5.81 and Q1 2027 EPS of $1.40–$1.42.