5 Beaten-Down Tech Stocks to Buy Today for Long-Term Gains

2. Zoom Video Communications, Inc. (NASDAQ:ZM)

Number of Hedge Fund Holders: 43

YTD Decline in Share Price as of June 8: 37.48%

Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications company that offers video, voice, chat, and content sharing options to users around the world. Although the stock became mainstream during the pandemic years and began losing value in 2022, it is positioned to grow as higher fuel costs and employees demanding flexible working conditions will likely lead to work-from-home/hybrid work mandates once again. 

Daiwa analyst Stephen Bersey on May 31 double upgraded Zoom Video Communications, Inc. (NASDAQ:ZM) to Outperform from Underperform with a price target of $121, up from $107. The recent pullback in the stock offers an attractive entry point, the analyst told investors. He likes Zoom Video Communications, Inc. (NASDAQ:ZM)’s primary business and noted that growth expectations now “seem more realistic”. Zoom Video Communications, Inc. (NASDAQ:ZM)’s “solid execution” in Q1 adds to the analyst’s “positive incremental conviction” that demand for Zoom’s core business is stabilizing.

According to Insider Monkey’s Q1 data, 43 hedge funds were long Zoom Video Communications, Inc. (NASDAQ:ZM), compared to 48 funds in the prior quarter. Jim Simons’ Renaissance Technologies held one of the largest positions in the company, consisting of 6.4 million shares worth $756 million. 

Here is what Artisan Partners has to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2021 investor letter:

“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”