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Why Zoom Video Stock Popped Today

By Chris Neiger – Oct 19, 2020 at 2:32PM

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As COVID-19 cases climb, investors believe Zoom will help people ride out the pandemic this winter.

What happened 

Shares of Zoom Video Communications (ZM -0.68%) were rising today as COVID-19 cases in the U.S. and Europe continue to climb. As fears that cases of the disease will increase during the fall and winter, investors have again focused their attention on tech stocks that they believe will be in demand during the pandemic. 

Zoom's stock was up by as much as 5.3% today but had gained 3.2% as of 2:15 p.m. EDT. 

So what 

Technology stocks have been in demand since the pandemic reached the U.S., and investors appear to be continuing that trend with Zoom's share-price bump today. As lockdowns and social distancing have gripped the U.S., Zoom's stock has skyrocketed, rising 750% since the beginning of this year.

A white line graph on a dark background.

Image source: Getty Images.

Medical experts in the U.S. have warned that there could be a surge of COVID-19 cases in the fall and winter, and last week 10 states reported their highest single-day case counts. Additionally, 27 states are seeing their case counts climb. And as cases have increased in Europe, local governments in Paris and London recently increased social restrictions in their cities. 

It appears that investors are expecting that the increase in cases will lead to even more social distancing, which could boost usage of Zoom's video calls. 

Now what

While Zoom's stock has been on a tear this year, investors should keep in mind that there's still a lot of uncertainty surrounding the U.S. economy, the presidential election, and the pandemic. All of those things could cause unexpected volatility in the stock market in the coming months.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

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