Are we at the beginning of a bull market? It depends on who you ask. After eight positive weeks in a row and a 31% gain in the year to date, most investors think the Nasdaq Composite index has turned the corner.

If you want to know which stocks to buy at the beginning of a bull market, it pays to study Ark Invest, the asset management company run by Cathie Wood. Her flagship fund, the Ark Innovation ETF, gained 149% in 2020.

Zoom Video Communications (ZM 1.57%) is the third-largest holding in the Ark Innovation ETF's portfolio at the moment. It's a huge holding because Ark Invest believes it could reach $1,500 by 2026, which implies a stunning 180% annual return rate.

But before you open your stock brokerage app to go all-in on Zoom Video, there are a few things you should know.

From individuals to enterprises

By the end of this year, 39% of global knowledge workers will work in hybrid scenarios, and another 9% will be fully remote, according to Gartner. In 2026, Ark Invest projects 75% of global knowledge workers will be in a hybrid or remote working situation.

Converting free individual Zoom users into paying subscribers is an uphill battle, but enterprise customers are expected to pick up the slack. By 2026, Ark Invest expects half of Zoom's total user base to become paying subscribers.

Revenue rose just 3% year over year during the company's fiscal first quarter, which ended April 30, but this figure doesn't paint a complete picture. Zoom's fiscal first quarter was a relatively difficult month for enterprise software service providers in general as fear of a recession caused many businesses to tighten their belts.

Wood is likely encouraged by Zoom Video's continued uptake among its largest customers. Enterprise revenue during the fiscal first quarter jumped 13% year over year. Moreover, the number of customers contributing more than $100,000 annually was up 23% year over year at the end of April.

Ark Invest isn't expecting individual users to start paying for subscriptions again as they did during COVID-19 pandemic-related lockdowns. Instead, Wood is projecting that a majority of enterprise customers and 50% of its overall user base will be paying subscribers.

A buy now?

During Zoom's fiscal 2024, which ends next April, management expects around $1.64 billion in adjusted earnings at the midpoint of its guided range. Right now, you can buy the stock for 42.7 times the company's own forward-looking earnings expectations.

Zoom's forward-looking price-to-earnings ratio is modest if Ark Invest's predictions come true. That said, a lot can go wrong. For example, Ark's $1,500 estimate implies large revenue contributions from AI-enabled products, but we don't know how popular they'll be yet.

This spring, Zoom unveiled a new set of still-experimental features that leverage generative AI to support chat, email, and meeting summaries. It's also building new features that can summarize long chat threads and help tardy meeting participants to catch up.

Zoom's AI-related intentions are commendable, but expecting them to contribute meaningfully to total revenue might not be realistic. Ark issued a bear case for Zoom Video's stock that assumes zero contribution to average revenue per user from the company's AI-powered tools. Without AI-related contributions, Ark Invest thinks Zoom will be worth $700 per share in 2026.

Even the bearish projection from Ark Invest implies a 938% gain in three short years. Making a stock as volatile as Zoom a top holding probably isn't a great idea, but buying some shares for a well-diversified portfolio looks like a smart move.