Although stocks of companies linked to artificial intelligence (AI) have been something of a see-saw these past few months, investors are still clearly excited about the technology.
On Monday, an analyst noted that Zoom Video Communications (ZM +11.29%) could benefit materially from a recent AI investment. That was enough to ignite a rally in the teleconferencing company's stock, and it closed the day more than 11% higher.
A prescient investment
In May 2023, Zoom disclosed that it had invested in and launched a strategic partnership with Anthropic, the privately held company best known for its Claude AI platform. At the time, Zoom did not provide any financial details of the arrangement.
Image source: Getty Images.
On Monday, Baird analyst William Power wrote a new research note on Zoom. According to reports, he wrote that by his estimation, the company invested $51 million in Anthropic in the deal. Placing that within the $350 billion valuation rumored for Anthropic, Zoom's stake could be worth $2 billion to $4 billion.
Although Anthropic management has not yet announced concrete plans for an initial public offering (IPO), it has made certain moves -- such as apparently hiring a law firm well known for advising companies through the IPO process -- that strongly indicate it will do so.
NASDAQ: ZM
Key Data Points
A monster return on investment
While it's wisest to invest in a stock primarily based on its potential for organic growth, Zoom's investment in Anthropic could indeed be compelling. An Anthropic IPO is increasingly likely, and if it happens, it'll surely be a monster issue given Claude's prominence and the fact that its developer is a pure-play AI company.
I think Power's new take is a smart way to look at Zoom stock these days.
