Baird has reaffirmed an Outperform rating on Zoom Video with a $95.00 price target, underscoring the potential upside embedded in the company’s minority stake in AI firm Anthropic. The analyst note highlights how the revaluation of that strategic investment could meaningfully change how investors view Zoom’s enterprise value and core business multiple.
Zoom made a $51 million equity investment in Anthropic in May 2023. Based on assumptions tied to Anthropic’s current market valuation - which Baird cites at roughly $350 billion versus the $4.5 billion valuation at the time of Zoom’s initial investment - the firm estimates Zoom’s Anthropic holding could now be worth between $2 billion and $4 billion, subject to dilution scenarios.
The company recorded a $406.1 million gain on strategic investments in its fiscal third quarter. Baird attributes most of that gain to Zoom’s Anthropic stake and notes the accounting impact raised GAAP earnings per share by $1.33 for the quarter.
When Baird adjusts Zoom’s balance sheet to reflect an estimated $2 billion value for the Anthropic stake, the firm arrives at a roughly $15 billion valuation for Zoom’s core operations. By comparison, Baird points to a market capitalization near $25 billion and an enterprise value of about $17 billion after accounting for approximately $8 billion in net cash on the balance sheet.
Market metrics cited in the analysis further portray a solid balance sheet: available data show Zoom’s market capitalization at $28.29 billion, a current ratio of 4.45 and an Altman Z-Score of 9.38, indicators Baird interprets as confirming financial strength.
On a free cash flow basis, Baird projects Zoom will generate $1.92 billion in fiscal 2027. That forecast implies Zoom is trading at about 9.0 times that projected 2027 free cash flow. After adjusting for the firm’s estimate of Anthropic equity value, the multiple falls to roughly 8.0 times.
Year-to-date, Zoom’s stock is down about 1%, versus a 1% gain for the S&P 500 and an 8% decline for the iShares Expanded Tech-Software Sector ETF, figures Baird uses to frame relative performance amid broader tech sector moves.
Recent quarterly results offered modest upside on the top line. Zoom reported revenue growth of 4.4% year-over-year for the quarter, beating UBS’s expectation by $15 million. The Enterprise segment expanded 6% year-over-year, ahead of UBS’s 5% projection. Those results elicited a range of responses from other brokerages:
- UBS retained a Neutral rating and an $85 price target.
- Benchmark reiterated a Buy rating and kept a $110 price target, pointing to Zoom’s strong quarter and raised guidance for fiscal 2026.
- Bernstein nudged its price target up to $90 from $89, citing two quarters of performance above guidance.
- Cantor Fitzgerald maintained a Neutral stance with an $87 price target, noting healthy Enterprise and Online revenue driven in part by AI-enabled offerings.
Baird analyst William Power specifically highlighted the possible multi-billion-dollar valuation uplift from Zoom’s 2023 Anthropic investment, reiterating the $2 billion to $4 billion estimate. Taken together, the series of broker reactions and the Anthropic valuation thesis reflect both operational progress at Zoom and the shifting calculus investors must apply when large strategic holdings are revalued.
For analysts and investors assessing Zoom, the presence of a potentially high-value strategic stake in a leading AI startup alters common valuation frameworks. Baird’s work demonstrates how an otherwise modest capital outlay can produce outsized balance-sheet effects if the investee experiences dramatic appreciation. At the same time, a range of price targets and ratings from other brokerages indicates that market participants continue to weigh execution on Zoom’s core business against the valuation implications of its strategic investments.