Popular star picker and Tesla Inc. (NASDAQ: TSLA) bull Cathie Wood, who runs Ark Investment Management, said on Sunday that Zoom Video Communications Inc (NASDAQ: ZM), will "win big" in its sector despite bearish analyst calls on the videoconferencing firm.
What Happened: Wood has been piling up shares in Zoom, though she has recently taken an opposite stance in other work-from-home stocks such as Netflix Inc (NASDAQ: NASDAQ:NFLX) and Docusign Inc (NASDAQ: DOCU).
Naysayers lump Zoom $ZM into profit less tech, concept capital, stay at home stocks. Along with Microsoft, we believe that Zoom will be a prime beneficiary of the first “rip and replace” cycle since the early nineties in the $1.5 trillion global enterprise communications space. https://t.co/2IJ8WICB1DWork-from-home stocks got a big boost in 2020 following COVID-19 lockdowns, though analysts have recently slashed their estimates significantly as economies and offices reopen.— Cathie Wood (@CathieDWood) May 8, 2022
“WFH poster childs (Netflix, Zoom, Docusign, etc.), and frothy low-quality tech names continue to see dark days ahead as a pull forward growth and a normalizing economy play out in the summer timeframe and beyond,” Wedbush analyst Dan Ives wrote in a note last week.
Wood’s WFH Bets: The stock picker exited Netflix earlier this year and has recently been selling shares in Docusign. Ark Invest held 8.46 million shares of Zoom, worth $853 million based on Friday’s close.
The stock picker has also been betting on other cloud-based videoconferencing firms such as Five9 and RingCentral Inc (NYSE: RNG), which also received a boost from pandemic curbs.
See Also: Cathie Wood's Ark Is Now Completely Out Of Netflix
Zoom competes with bigger rivals such as Microsoft Corp (NASDAQ: NASDAQ:MSFT)-led Teams, and Alphabet Inc (NASDAQ: NASDAQ:GOOGL) (NASDAQ: GOOG)-owned Google Chat allows users to make calls via the apps downloaded on their phones.
Wood has also been buying shares in Roblox Corp (NYSE: RBLX) and Roku Inc (NASDAQ: ROKU)
Price Action: Zoom closed 4.4% lower at $96.38 on Friday. The stock is down 48% year-to-date and 83% since hitting the pandemic highs in October 2020.
Latest Ratings for ZM
| Mar 2022 | Wolfe Research | Downgrades | Outperform | Peer Perform |
| Mar 2022 | RBC Capital | Maintains | Outperform | |
| Mar 2022 | Wells Fargo (NYSE:WFC) | Maintains | Equal-Weight |
View the Latest Analyst Ratings
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