New York, Feb 26, 2026, 15:56 EST — Regular session
- Shares dropped roughly 12% during the afternoon session, deepening losses after Zoom’s outlook failed to impress investors.
- The company said its adjusted first-quarter profit outlook came in below what Wall Street was looking for, even as revenue guidance landed close to estimates.
- Margins, customer churn, and whatever management says next about pricing and AI spending are on traders’ radar.
Shares of Zoom Communications (ZM.O) slid roughly 12% to $75.11 in Thursday afternoon trading, as the company’s guidance disappointed investors. The stock swung between $72.93 and $80.06 following a Wednesday close at $85.41. 1
It’s a big deal for Zoom, which is working to assure investors it can expand even as competition heats up and spending on new AI features climbs. Right now, a cautious profit outlook doesn’t go over well—investors are quick to react if they sense margin pressure.
Zoom late Wednesday put out guidance for adjusted earnings per share this quarter at $1.40 to $1.42, falling short of the $1.45 average analyst call tracked by LSEG. For revenue, the company is looking for $1.22 billion to $1.23 billion — roughly matching consensus. The company’s latest quarter saw revenue come in ahead of expectations, but adjusted profit missed. Zoom continues to grapple with heavier competition from Microsoft’s Teams and Alphabet’s Google Meet, as corporate clients keep a tight grip on budgets. 2
Zoom CEO Eric S. Yuan flagged faster “revenue growth” for fiscal 2026, crediting stronger uptake of its platform in both internal workflows and customer service. For fiscal 2027, Zoom is projecting revenue between $5.065 billion and $5.075 billion, alongside adjusted (non-GAAP) earnings of $5.77 to $5.81 a share. The company wrapped up January with $7.8 billion in cash and marketable securities, and bought back about 3.8 million shares during the quarter. 3
Zoom isn’t letting up on automation. The company rolled out Zoom Virtual Agent 3.0 for contact centers on Tuesday and announced plans to demo it at Enterprise Connect in Las Vegas, March 10–12. “Agentic AI was just the beginning,” said Chris Morrissey, Zoom CX general manager, in the release. 4
Analyst reactions landed fast. Bernstein SocGen dropped its price target to $88 from $90 and left its market-perform stance in place, highlighting what it called a stabilization in online churn—customer cancellations—and flagging a fresh annual product price hike set to start mid-March. KeyBanc, for its part, bumped its target to $74 from $69 but stuck with an underweight rating, according to a note roundup from Investing.com. 5
Zoom shares dropped during a tough day for growth names, as U.S. indexes lost ground. Investors took a closer look at stretched tech valuations after Nvidia’s earnings and outlook didn’t give the wider AI sector much of a boost. 6
The road ahead looks messy. Should AI costs outpace revenue gains, or if Zoom faces steeper discounts amid tougher competition, that upbeat profit forecast could be wishful thinking — and the shares might stay under strain.
Eyes will be on Zoom’s online business for any uptick in customer retention, while enterprise clients’ adoption of products like phone and contact center tools is also in the spotlight. Pricing moves could become a sticking point, particularly if churn edges higher after the latest increases take effect.
Zoom is set to take the stage at the Morgan Stanley Technology, Media & Telecom Conference on March 2, per its posted investor events calendar. On the radar for traders: clarity around AI monetization, margin updates, and any read on how customer demand is shaping up for the next quarter. 7
