What happened

Battered by the recent tech stock rout, Zoom Video Communications (ZM 0.05%) was reversing course dramatically on Wednesday. Thanks largely to a high-profile investor's buy, the teleconferencing company's shares were up by nearly 10% in late afternoon trading.

So what

That buyer is none other than Cathie Wood, the closely followed CEO of investment management firm ARK Invest. It came to light that ARK Invest's ARK Innovation ETF (ARKK -2.83%) scooped up just over 19,000 Zoom shares on Tuesday, the second straight day it had purchased the company's stock.

Person at a desk in front of two large monitors, participating in a videoconference.

Image source: Getty Images.

That buy pushed Zoom into the No. 1 position in ARK Innovation's portfolio; it now comprises nearly $696 million in market value, for just over 9% of the exchange-traded fund's total holdings. Zoom displaced longtime Wood favorite Tesla (TSLA 0.52%), the market value of which stood at $636 million.

Now what

As with any up-and-down tech stock lately, opinions are divided on whether Zoom -- which shot to prominence and popularity during the shut-in period of the coronavirus pandemic -- is a bargain or a bust.

As news of ARK Innovation's latest Zoom buy hit the headlines, Bank of America Securities analyst Daniel Bartus lowered his price target on the shares to $162 from the former $200. He is maintaining his neutral recommendation.

Bartus expects the company's churn rates to drop in the second half of its fiscal 2023, but he added, "We believe the improvement could be uneven as the COVID-19 reopening headwinds and return-to-work pressures potentially apply greater-than-projected pressure on historic churn trends."