5 Best ARK Stocks To Buy Now

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

ARK Investment’s Stake Value: $1,028,943,000

Percentage of ARK Investment’s 13F Portfolio: 6.08%

Number of Hedge Fund Holders: 44

Zoom Video Communications, Inc. (NASDAQ:ZM) is an IT company offering a range of communication products and services. The company offers Zoom Meetings, Zoom Phone, and Zoom chat, among more.

William Power, an analyst at Baird, holds an Outperform rating on Zoom Video Communications, Inc. (NASDAQ:ZM)  shares as of August 23. The analyst also has a $125 price target on the stock.

Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS in the second quarter of 2023 was $1.05, beating estimates by $0.12. Its revenue of $1.10 billion also beat the previous quarter’s revenue of $1.07 billion. Over the next three to five years, Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS is expected to grow by 16%.

Out of 895 hedge funds, 44 hedge funds held stakes in Zoom Video Communications, Inc. (NASDAQ:ZM) in the second quarter. Their total stake value was $2.9 billion.

Horos Asset Management, an investment management firm, mentioned Zoom Video Communications, Inc. (NASDAQ:ZM) in its first quarter 2022 investor letter. Here’s what they said:

“What about the other asset class that has attracted the most attention from the investment community in recent times? Here we can distinguish three major groups. First, those companies without earnings that had convinced investors of their great future growth prospects, pushing up their valuations to irrational levels. A clear example of this, which we mentioned almost two years ago (see here) is Zoom Video Communications (“Zoom”), whose market cap exceeded that of companies such as IBM or came close to that of Cisco Systems. Well, from the time we wrote about this odd situation until today, Zoom shares have collapsed nearly 80%.

Therefore, if interest rates rise (or are expected to rise), company valuations are negatively impacted. This is especially true for those businesses that generate little cash today and the market expects them to generate a lot of cash in the future. Hence the severe losses in companies that promised a lot of cash generation in the future (such as Zoom).”