New York, May 26, 2026, 17:02 (EDT)
- Zoom shares fell 5.3% to $100.09 in late trading, after dropping as low as $99.82 earlier in the session.
- Zoom raised its outlook for fiscal 2027 and bumped its stock buyback plan by $1 billion, but shares sold off after the news.
- Citi’s Tyler Radke raised his price target to $126. Still, investors kept their eyes on growth durability and churn.
Zoom Communications shares dropped over 5% Tuesday, pulling back after last week’s AI-fueled earnings pop. Investors looked at whether the company’s better outlook could keep the stock at its recent highs.
Zoom shares were recently at $100.09, off 5.3%. The stock hit a high of $106.50 and a low of $99.82 during the session. Volume was about 5.4 million shares. Zoom’s market cap was around $30 billion.
This came in the first full U.S. session after markets were shut for Memorial Day. With Nasdaq’s 2026 holiday schedule marking May 25 as closed, the action played out on Tuesday.
Zoom slipped while broader markets gained. The Invesco QQQ ETF, which tracks the Nasdaq-100, climbed around 1.7%. Investors stuck with bigger technology names linked to artificial intelligence.
The company bumped up its fiscal 2027 revenue target last week to a new range of $5.08 billion to $5.09 billion, just above its earlier view for $5.07 billion to $5.08 billion. The adjusted EPS forecast also moved higher, now at $5.96 to $6.00. The board cleared an extra $1 billion for buybacks, which can help lift per-share earnings by cutting the share count.
Zoom’s Q1 revenue was up 5.5% to $1.239 billion. Enterprise sales rose 7.2% to $755.7 million. CEO Eric Yuan said customers are using Zoom as “an AI-first system of action for modern work.” Paid users of AI Companion jumped 184% year-on-year, the company said. Zoom Communications, Inc.
Citi’s Tyler Radke lifted his price target on Zoom to $126 from $122 and reaffirmed a Buy on Tuesday. The Fly said Citi called the quarter strong, pointing to analyst support for Zoom’s bets on AI and enterprise growth.
Still, investors brushed off Zoom’s AI messaging. The second-quarter adjusted earnings guide was $1.45 to $1.47 a share, just under the $1.48 Wall Street was looking for, based on LSEG numbers from Reuters. Zoom’s revenue forecast for the quarter, $1.26 billion to $1.27 billion, landed about where the Street had it.
Competition is still tight. Zoom highlighted some enterprise wins, like a government contractor switching from Microsoft Teams and Cisco Calling, though these accounts often face lower prices, bundling, or lengthier replacement cycles from rivals. CFO Michelle Chang described higher online churn, or customer cancellations, as just a “nominal uptick,” saying she didn’t “read too much into it.” Barchart
Investors may want Zoom to speed up revenue growth faster than the company can manage. AI features might help with retention, but to matter, they need to turn into more paid seats, bigger deals and fewer cancels. If that doesn’t happen, the shares could remain weak, even though margins, cash flow and buybacks stay high.
Zoom is set to present to investors again on June 2 at the William Blair Growth Stock Conference. Management will have another shot to back up its post-earnings claims that AI is helping and enterprise demand is improving. But the market is still looking for evidence that the gains are durable.
