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Why Shares of Zoom Video Spiked Today

By Chris Neiger – Aug 4, 2021 at 3:57PM

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Investors may be eyeing the company's stock as COVID-19 cases are on the rise.

What happened 

Shares of Zoom Video Communications (ZM -0.97%) were rising today on seemingly no company-related news. But investors may be warming back up to Zoom as the delta variant of COVID-19 spreads across the U.S. 

The tech stock gained as much as 7.5% and was up by nearly 7% as of 3:38 p.m. EDT. 

So what

The maker of the popular video-calling app, Zoom, saw its share price jump today, likely because some investors are concerned that rising COVID-19 cases caused by the delta variant are bringing more restrictions. 

A computer with people on the screen.

Image source: Getty Images.

Zoom's app became the go-to service for communicating with friends, family, and colleagues during strict lockdowns and social distancing last year, and that helped drive up Zoom's share price in 2020.

But when the U.S. rolled out its vaccination plan late last year and social restrictions eased earlier this year, Zoom's share price tumbled.

Most recently, with cases of COVID-19 trending up again because of the delta variant, investors have once again focused their attention back on Zoom as a way to ride out coronavirus uncertainty. 

Now what 

It's unclear whether Zoom's stock price will reach the same heights that it did last year, but it's becoming clear that investors believe the company could continue to grow as more cities across the U.S. implement varying mask and vaccine mandates. 

What's also clear is that after more than a year of investors trying to determine the best short-term pandemic plays, Zoom's rebound helps prove that keeping a long-term perspective on an investment is a better strategy. 

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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