Shares of Zoom Video Communications (ZM 2.21%) rose today as investors began slowly coming back to technology stocks after a two-day sell-off.
Zoom Video's stock jumped by as much as 7.7% in morning trading and was still up by 3.4% as of 11:17 a.m. EST.
Zoom's stock took a hit on Monday and Tuesday as investors processed the news that Pfizer's coronavirus vaccine candidate is more than 90% effective and that the company could potentially have 1.3 billion doses available sometime next year.
A vaccine that could help prevent the novel coronavirus is a good thing, of course, but some investors are concerned that it could curb a lot of the growth that Zoom and other technology stocks have experienced during the pandemic. As lockdowns and social distancing became the norm for many Americans, people flocked to Zoom's videoconferencing services, helping to drive the company's revenue up 355% in the most recent quarter.
Zoom's share price bump today appears to come from some investors coming back to the stock after the recent sell-off. The gains from today add to an astounding year for Zoom's stock, with shares gaining 470% year to date.
Zoom's share price swings over the past few days show just how persuaded some investors can be by the daily news. Instead of watching the headlines so closely, Zoom investors would be better off digging into the company's quarterly financials, developing an investment thesis for the stock, and then sticking with their investment unless something fundamentally changes with Zoom's business.