10 Biggest Stocks with Negative Beta to Consider

4. Zoom Video Communications (NASDAQ:ZM)  

Number of Hedge Fund Investors: 39  

Beta: -0.05  

Market Cap as of October 13: $21.75 Billion  

Zoom Video Communications (NASDAQ:ZM) became a household name during the COVID-19 pandemic, providing cloud-based video conferencing and collaboration services. The company continues to expand into new areas, including AI-powered solutions, and its growth has moderated compared to the pandemic peak.

In Q2, Zoom Video Communications (NASDAQ:ZM) reported a 2.1% annualized gain in revenue, beating consensus estimates, and a 15% beat on adjusted EPS. Net income rose to $219 million, indicating a 20.3% growth rate. Enterprise revenues were stronger, the company’s customer count in contact center markets grew over 100% year over year, and the portion of customers generating at least $100,000 in sales rose above 3,900. The company’s retention rates are at historic lows, with figures at 2.9% which shows that fewer customers are leaving the platform for larger name alternatives. The company’s cash position is strong, with $7.5 billion on its balance sheet, which could inspire share buybacks in the future.

In October, Zoom Video Communications (NASDAQ:ZM) held its annual Zoomtopia conference, the event highlighted the company’s focus on artificial intelligence (AI) and contact center solutions. Will Power Senior Research Analyst covering Cloud Services, at the investment firm Baird noted that 57% of the Fortune 500 has already enabled Zoom AI Companion. Additionally, Power mentioned that AI Companion 2.0 is adding more capabilities, which is expected to drive growth for the company.

Power remains positive on Zoom’s expanding platform, citing growth opportunities in phone, contact center, and AI. The analyst continues to recommend Zoom Video (NASDAQ:ZM) as a value idea, maintaining an Overweight rating on the stock. This endorsement is a testament to the company’s strong growth trends and its potential for continued success in the software industry. Zoom Video’s (NASDAQ:ZM) forward P/E ratio is 13.21, which represents a significant 45.70% discount compared to the sector median of 24.33.