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Why Zoom Stock Jumped Today

By Joe Tenebruso - Updated Jan 14, 2021 at 5:39PM

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Investors are once again growing bullish on the cloud communications leader's growth prospects.

What happened 

Shares of Zoom Video Communications (ZM -0.39%) climbed 5.1% on Thursday, as the cloud technology company continued to rebound from its recent lows.

So what

Zoom's stock price fell more than 40% from its highs back in October following promising vaccine data from Moderna and Pfizer. Investors rotated out of so-called stay-at-home stocks and into businesses that stood to benefit from a post-pandemic economic recovery.

A person is pointing to a chart that rises, then falls, then rises again.

Shares of Zoom Video Communications rallied on Thursday. Image source: Getty Images.

Yet in recent days, investors appear to be rotating back into Zoom. The cloud communications leader's announcement on Tuesday that it had sold 1 million Zoom Phone seats within two years of the product's launch contributed to the gains. Zoom Phone is a key part of the company's strategy to become a unified communications platform, by integrating phone, video, chat, and other cloud-based tools across desktop and mobile devices. 

Now what 

Zoom also conducted a public stock offering this week, during which it raised roughly $1.75 billion. It is already a highly profitable company, so its decision to sell stock to raise cash could suggest that it's planning an acquisition. Investors are likely intrigued by the possibilities, as a strong merger partner could help to accelerate Zoom's already impressive growth.

 

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