TLDR
- Zoom stock rallied 11% after analysts uncovered the potential value of its 2023 AI investment
- Baird estimates Zoom’s $51 million Anthropic stake could now be worth $2-4 billion
- The investment represents a potential 78x return based on Anthropic’s $350 billion valuation
- Anthropic shows signs of preparing for an IPO that could unlock value for Zoom
- Thirteen analysts rate Zoom a Buy with a consensus target of $99.11
Zoom Video Communications posted double-digit gains on January 26. The stock jumped over 11% following new analyst research about an overlooked investment.
Baird analyst William Power published estimates revealing the potential value of Zoom’s Anthropic stake. The video conferencing company invested in the AI startup back in May 2023.
At the time, Zoom and Anthropic announced a strategic partnership. Neither disclosed investment amounts publicly. Zoom reported $51 million in strategic investments that quarter.
Power’s analysis suggests the full amount went to Anthropic. That investment has appreciated substantially since then.
The Numbers Behind the Surge
Anthropic currently carries a $350 billion valuation. Based on that figure, Zoom’s stake could be worth between $2 billion and $4 billion. The estimate range accounts for potential ownership dilution.
The math shows a potential 78x return on the original investment. Power described this as a “hidden gem” overlooked by investors focused on Zoom’s operational challenges.
Zoom dominated headlines during the pandemic era. Remote work adoption drove massive user growth. That momentum has since faded as offices reopened.
The company has faced slowing revenue growth in recent quarters. Management has been developing AI features to reignite expansion. Early results show promise with improving customer metrics and rising call volumes.
What an Anthropic IPO Could Mean
The real story may be Anthropic’s trajectory. The AI company has experienced rapid growth as demand for platforms like Claude accelerates. Anthropic hasn’t formally announced IPO plans.
Yet indicators suggest a public offering is coming. The company reportedly hired legal advisors known for guiding IPO processes. Given Anthropic’s scale and pure AI focus, a listing appears probable.
An Anthropic IPO would transform Zoom’s investment from paper gains to realized value. It could deliver billions to Zoom’s balance sheet and create new strategic options.
Wall Street coverage reflects growing interest. Among 21 analysts tracking Zoom, 13 rate it a Buy. Seven maintain Hold ratings. One analyst recommends selling.
The average price target sits at $99.11 per share. That suggests roughly 5% upside from current levels. However, these targets were set before the Anthropic valuation estimates emerged.
Analysts are now revisiting their models. The Anthropic position provides value separate from core video conferencing operations. It adds a growth angle that previous estimates didn’t fully capture.
Recent Trading Activity
Zoom closed at $95.42 following the January 26 rally. The stock remains well below its pandemic-era peaks. But the Anthropic investment offers a fresh catalyst for revaluation.
The timing of Zoom’s original investment looks increasingly smart. The $51 million deployment happened in May 2023 before AI valuations reached current levels. Anthropic’s growth to a $350 billion valuation demonstrates how rapidly the sector has expanded.
If Anthropic proceeds with an IPO, Zoom shareholders could see substantial value creation. The investment would rank among the most successful corporate venture bets in recent technology history.
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