In this article, we will look at the 8 Best Video Conferencing Stocks To Buy According to Analysts.
An Overview of The Video Conferencing Industry
Video conferencing software connects two or more parties virtually through video and audio over an internet connection. During the COVID-19 pandemic when lockdowns shut almost everything, the video conferencing market witnessed a surge in demand. According to a report by Grand View Research, the video conferencing market was valued at around $4.21 billion in 2020 and the valuation rose significantly to around $7 billion in 2022. Moreover, as per the most recent figures. The video conferencing market was valued at $28.61 billion in 2023 and is projected to grow from $33.04 billion in 2024 to $60.17 billion by 2032, indicating a compound annual growth rate of 7.8%.
According to a BBC report published on June 3rd, 2020, during the pandemic, the usage of the video conferencing platform Zoom surged 30 times in April 2020 alone. The report further highlighted that the daily participant usage exceeded 300 million users during peak pandemic times.
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At first, the market growth was driven by the pandemic and lockdowns around the globe, which forced businesses, government organizations, and education institutes to adopt virtual modes of engagement. For instance, in May 2020, the World Health Organization (WHO) held its first-ever virtual assembly. Moreover, educational institutes used videoconferencing software to conduct graduation ceremonies.
Fast forwarding to the post-pandemic era now that the world is back to normal the video conferencing market is driven by the rise in remote jobs and e-learning. According to a report by Pew Research published on March 30, 2023, around 35% of the US workforce was working remotely in 2023. Although this figure was down from 43% recorded in January 2022 and 55% in October 2020, which is the pandemic era, the percentage of remote workers was still up 7% compared to pre-pandemic years.
Looking at the regional insights, North America held the largest market share of around 31% in 2023 as it benefits from the large organizations that are engaged in developing video conferencing software. Moreover, the region is also home to an experienced workforce capable of adopting remote work. In addition to North America, the Asia Pacific region is expected to grow at the fastest CAGR due to the growing interest in digitalization across businesses, governments, and educational institutes.
Looking ahead, the rise and recent developments in artificial intelligence, the Internet of Things, and cloud technologies are expected to further boost the video conferencing market. According to a report by the World Economic Forum, global digital jobs are estimated to grow by around 25% to reach over 95 million indicating the growth prospects for video conferencing software due to its indispensable position for remotely operating organizations.
With that, let’s take a look at the 8 best video conferencing stocks to buy according to analysts.
A close-up of a hand using a laptop to control an immersive video meeting.
Our Methodology
To curate the list of 8 best video conferencing stocks to buy according to analysts we used various internet rankings and our previous articles. We compiled a list of video conferencing companies that were most widely held by hedge funds, sourced from Insider Monkey’s Q2 2024 hedge funds database. Next we checked analysts upside potential for each stock from CNN and ranked our stocks in ascending order of their upside potential. Please note that the data was recorded on November 8th 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Video Conferencing Stocks To Buy According to Analysts
8. 8×8, Inc. (NASDAQ:EGHT)
Number of Hedge Fund Holders: 19
Analysts Upside Potential: 9.09%
8×8, Inc. (NASDAQ:EGHT) is a technology company that provides cloud-based communication solutions primarily for businesses. The company offers a unified platform that combines various communication tools into one service. These include voice calls, video meetings, team messaging, and SMS.
They also provide tools for customer service teams, allowing businesses to manage interactions with customers across multiple channels like phone, chat, and email, thus improving customer experience and operational efficiency.
8×8, Inc. (NASDAQ:EGHT) ranks among the best video conferencing stocks to buy according to analysts. Its technology platform supports video meetings that can accommodate numerous participants, making it easier for teams to hold virtual meetings. The platform includes features for team collaboration such as file sharing and instant messaging, which are essential for remote work environments.
On top of that, the 8×8 XCaaS platform also offers application programming interfaces (APIs) that allow other software developers to integrate communication features into their own applications.
Over the last decade, the company has grown its revenue by 17% and its levered free cash flow by 20% indicating strong fundamentals. It released its second quarter results for fiscal 2025 on November 4th and posted service revenue of $175 million and total revenue of $181 million.
While the service revenue was above guidance and the total revenue was towards the high end of management’s guidance range, it was slightly down on a year-over-year basis. Management had already expected the decline due to uncertainties in the CPaaS business and had cautious guidance for the quarter.
8×8, Inc. (NASDAQ:EGHT) has been making significant advancements in artificial intelligence. During the quarter it announced advancement in language support and real-time accuracy powered by the latest OpenAI Whisper model, enabling an increased number of languages for live web chats. Looking ahead management is expecting revenue in the range of $177 million to $182 million.
7. RingCentral, Inc. (NYSE:RNG)
Number of Hedge Fund Holders: 33
Analysts Upside Potential: 11.99%
RingCentral, Inc. (NYSE:RNG) is an AI-driven technology company that specializes in cloud-based communication solutions for businesses. The company offers a comprehensive suite of services including Unified Communications as a Service (UCAAS), which integrates voice, video, messaging, and collaboration tools into one service, allowing businesses to communicate seamlessly across various devices, and Contact Center as a Service (CCaaS), which provides businesses with tools to manage customer interactions across multiple channels. The company also provides video conferencing solutions for SMBs, large enterprises, remote workers, and global organizations.
It operates through four segments including Subscription Services, Professional Services, Hardware Sales, and Integration Partnerships. The company generates around 90% of its revenue from the subscription fee that customers pay for its cloud software.
On November 7th, 2024, RingCentral, Inc. (NYSE:RNG) released its third-quarter results for fiscal 2024. During the quarter the company announced a series of innovations related to AI integration to its software platforms. For instance, the company announced new innovations to its AI-powered RingCX, including a real-time AI-powered assistant for both agents and supervisors and advanced AI-based coaching insights for managers and supervisors.
The RingCentral AI assistant was introduced to the company’s flagship cloud communication platform, which has the ability to generate real-time notes from phone calls or video conference meetings. Moreover, this feature is now available at no additional cost for RingEX customers.
In addition to these AI-related highlights, the financial results were also encouraging. The company improved its total revenue by 9% year-over-year during the quarter which reached $609 million. The revenue growth was driven by a 10% increase in subscription revenue, which accounted for 96% of the total revenue.
What’s impressive about RingCentral, Inc. (NYSE:RNG) is its ability to generate substantial recurring revenue. In the third quarter alone, the company improved its monthly ARR by 9% to $2.48 billion and enterprise ARR by 11% to $1.07 billion. This strong recurring revenue enables the company to generate healthy free cash flow, which improved 51% year-over-year to $105 million for the quarter.
Looking ahead, management expects Q4 revenue to be between the range of $611.0 million to $613.0 million, indicating a 7% increase year-over-year. It is one of the best video conferencing stocks to buy according to analysts.
RiverPark Large Growth Fund made the following comment about RingCentral, Inc. (NYSE:RNG) in its Q1 2023 investor letter:
“RingCentral, Inc. (NYSE:RNG): Despite better-than-expected 4Q results and strong profitability guidance for 2023, RNG shares were a top detractor for the quarter following lower than expected revenue guidance for the full year 2023. Investor concerns appear to be centered around the competitive dynamics in the space. We continue to believe that RNG remains far ahead of its competition in both product breadth and depth in what is an enormous market. RNG has consistently maintained its #1 product ranking by Gartner for Large Enterprises and continues to expand its channel partnerships with large scale telecom services firms including Alcatel-Lucent, Atos, Avaya and Mitel, giving the company a significant leg up in converting on-premises PBX customers.
RingCentral is the largest and fastest growing pure play Unified Communications as a Service (UCaaS) vendor. Traditionally, business communications have been comprised of on-premises hardware-based private branch exchanges (PBX), which primarily support voice-only desktop phones. These systems do not support employees who now communicate from anywhere with any device, using voice, video, text, messaging and social media. UCaaS encompasses solutions addressing all these needs in a capital and labor light model for customers. RNG is the UCaaS market leader with two million users in an extremely fragmented market and is growing rapidly. The company started in the small-and-medium business market and has migrated to also serving larger enterprises, helped by its channel partnerships. The company’s increasing scale from its growing recurring revenue should improve operating margins, allowing the company to achieve its long-term target of 20%-25% while also generating increasing FCF (which is expected to grow 150% this year).”
6. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 67
Analysts Upside Potential: 12.70%
Verizon Communications Inc. (NYSE:VZ) is a major telecommunications holding company that provides a wide array of communication, information, and entertainment services to consumers, businesses, and government entities. Its operations are divided into two primary segments: Verizon Consumer Group and Verizon Business Group.
While the Verizon Consumer Group segment engages in providing wireless and wireline services in the United States, the Verizon Business Group is designed to cater to business and government needs. Within this segment, the company provides tailored wireless and wireline services, data services, video conferencing services, and Internet of Things solutions.
The company ranks as the 6th best video conferencing stock to buy according to analysts. The video conferencing services offered by Verizon Communications Inc. (NYSE:VZ) include WITS 3 Video Conferencing, which is an interactive image and voice communication service supporting both pre-scheduled and on-demand conferences. It features 24/7 technical support and flexible reservation options for users.
The company also has a longstanding 29-year partnership with Cisco Webex Meetings, a cloud-based platform that integrates video and voice conferencing with messaging and file-sharing capabilities. This service is optimized for mobile devices, enabling users to connect from virtually anywhere.
The company released its third-quarter results for fiscal 2024 on October 22nd. The company delivered growth within its wireless service revenue and adjusted EBITDA growth. The wireless services revenue for the quarter was up 2.7% year-over-year and the adjusted EBITDA of $12.5 billion was the highest ever reported by the company.
However, its total revenue of $33.3 billion remained flat year-over-year, mainly due to tough market conditions characterized by high inflation. However, the prospects of growth for the company remain bright. Management projects that its wireless service business will also expand at a rate of around 3% this year. It is expected to be boosted further by the pending acquisition of Frontier Communications for $20 billion, which would expand its fiber network.
Lastly, its dividend yield of 6.6% remains one of the key points of attraction for investors. In September Verizon Communications Inc. (NYSE:VZ) increased its dividend by 1.9% marking the 18th straight year of dividend increase. Over the past decade, the company has increased its dividends by around 23%.
Third Point Management stated the following regarding Verizon Communications Inc. (NYSE:VZ) in its Q3 2024 investor letter:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
5. ON24, Inc. (NYSE:ONTF)
Number of Hedge Fund Holders: 16
Analysts Upside Potential: 14.38%
ON24, Inc. (NYSE:ONTF) is a company that specializes in providing a cloud-based intelligent engagement platform designed to enhance how businesses interact with their audiences through digital experiences. Their primary focus is on helping sales and marketing teams engage potential customers effectively by utilizing data-driven insights and personalized content.
The core offering of the company is its Intelligent Engagement Platform, which integrates various tools for webinars, virtual events, and content marketing. The platform leverages AI technology to provide insights that help businesses understand their audience better and optimize their marketing strategies. Some of the key offerings of the platform include ON24 Elite, which is a live, interactive webinar experience that allows for real-time engagement between presenters and attendees, and ON24 Forum, which facilitates video-to-video interactions, enhancing the connection between speakers and the audience.
The company reported third-quarter results for fiscal 2024 on November 7th. Revenue for the quarter came in at $36.33 million, which was a 7.39% decrease year-over-year. Although the revenue decreased, however, it was above analysts’ expectations by $0.7 million.
Management noted that the company exceeded profitability targets for the sixth consecutive quarter, indicating consistent financial improvement. Moreover, the quarter also marked the 3rd consecutive quarter of positive free cash flow generation, with net cash from operating activities at $0.3 million.
Moreover, there was a high single-digit year-over-year improvement in gross retention rates resulting in total ARR reaching $132.2 million. Looking ahead management of ON24, Inc. (NYSE:ONTF) expects revenue between $35.4 million and $36.4 million for the fourth quarter with substantial revenue coming from its core platform.
4. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Analysts Upside Potential: 15.29%
Amazon.com, Inc. (NASDAQ:AMZN) offers a variety of services and products through its Amazon Web Services (AWS) segment. The segment also focuses on video conferencing through its Amazon Chime platform.
Amazon Chime is a unified communications service that facilitates online meetings, video conferencing, calls, and chat. It is designed for both individuals and organizations, allowing users to connect seamlessly from various devices including desktops, mobile phones, and in-room video systems.
Some of the key features of the platform include HD video meetings with up to 100 participants in the Pro version. It also supports screen sharing, meeting chat, and dial-in options for convenience. The platform integrates smoothly with Microsoft Outlook for scheduling meetings and can be accessed through various devices.
Amazon.com, Inc. (NASDAQ:AMZN) released its third-quarter results for fiscal 2024. The company generated net sales of $158.9 billion up 11% year-over-year. Net sales were primarily driven by a strong performance in its AWS segment which includes Amazon Chime. The AWS segment’s sales improved 19% year-over-year to $27.5 billion.
Moreover, operating income for the segment was also impressive as it improved from $7 billion in Q3 2023 to $10.4 billion in Q3 2024. Looking ahead the company is expecting net sales to further improve between 7% and 11% year-over-year in Q4 2024.
Alphyn Capital Management stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
“Amazon.com, Inc.’s (NASDAQ:AMZN) continued growth is driven by its strong performance in AWS and advertising, which grew 19% and 20%, respectively. E-commerce growth moderated to 9.3%, likely due to softer consumer demand.
In previous letters, I mentioned how Amazon’s heavy investments in logistics and fulfillment suppressed margins for some time, but the company is now reaping the rewards of those earlier expenditures. European operations have been profitable for the second consecutive quarter, while North American operating margins have risen from pandemic lows to 5.3%. A key ongoing area of focus for Amazon has been reducing the “cost to serve”; this is beginning to show tangible benefits. In 2023, Amazon undertook a “regionalization” strategy, which divided the U.S. into eight distinct regions for fulfillment and transportation, with corresponding distribution centers in each. As I learned from an expert interview done by InPractise, “regionalization” has resulted in estimated shipping expenses dropping from $4.76 per unit to $4.50, and they are now approximately $4.26, with potential reductions of 2-3% annually. Interestingly, Amazon leaned on its third-party vendors (3P) to finance much of this strategy. It did so by requiring 3P vendors ship inventory to the multiple regional distribution centers, instead of to a single location as they used to do. Moreover, Amazon imposed penalties for failing to meet strict minimum and maximum quantities. In this way, Amazon used 3P inventory to expand its distribution capacity by around 24 million square feet, much of which it could use for its own 1P inventory. Clever strategy, but one wonders if this raises the risk of an eventual vendor backlash due to the added financial and logistical pressures on 3P sellers.
Like Alphabet, Amazon is investing heavily in its AWS infrastructure to support its growing AI business. In the first half of the year, the company spent $30.5 billion on capital expenditures, with plans to exceed that in the year’s second half. When questioned about this during the earnings call, CEO Andy Jassy emphasized that they are seeing significant demand for AI-related services, which he believes will become a “very large” business for Amazon.”
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Analysts Upside Potential: 21.52%
Microsoft Corporation (NASDAQ:MSFT) is a leading technology company that develops a wide range of software, services, devices, and solutions. Its offerings span several segments, including Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
The company is renowned for Microsoft Teams when it comes to video conferencing. The platform not only allows users to host meetings from anywhere, supporting both in-person and remote participants but also supports breakout rooms for smaller group discussions. Teams can accommodate up to 300 participants in a single meeting, with advanced plans allowing for webinars with up to 10,000 attendees.
In addition to basic video conferencing capabilities, Microsoft Teams integrates seamlessly with other Microsoft 365 applications including Word, Excel, and PowerPoint. This integration allows users to share files easily during meetings and collaborate in real-time on documents.
Microsoft Corporation (NASDAQ:MSFT) released its first-quarter results for fiscal 2025 on October 30 indicating top-line growth of 16% and bottom-line growth of 11%, year-over-year. The Productivity and Business Processes segment which operates Microsoft 365 commercial products and Microsoft Teams was one of the major contributors to revenue growth. The segment revenue for the quarter was $28.3 billion, up 12% year-over-year.
Microsoft Corporation (NASDAQ:MSFT) is one of the best video conferencing stocks to buy according to analysts.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Analysts Upside Potential: 23.72%
Alphabet Inc. (NASDAQ:GOOGL) the parent company of Google, operates through various segments, including Google Services, Google Cloud, and Other Bets. Within these segments, Alphabet provides a range of services and products, with the Google Meet Platform focusing on video conferencing.
Google Meet is integrated within Google Workspace offerings and ensures seamless integration with other Google applications such as Calendar and Gmail, allowing users to join meetings directly from calendar events or email invites. It also features live captions, breakout rooms, meeting recordings, and AI real-time note-taking.
Alphabet Inc. (NASDAQ:GOOGL) released its third-quarter results for fiscal 2024 on October 29. The consolidated revenue for the quarter increased 15% year-over-year to $88.3 billion. Google Cloud segment which deals with Google Workspace was the main contributor to revenue growth. Revenue for the segment grew 35% year-over-year mainly led by AI infrastructure and generative AI solutions within the Cloud Platform services.
The net income of the company was also notable as it improved by 34% year-over-year. CEO Sundar Pichai mentioned that their long-term focus and investments in AI are paying off as it is helping the company drive more product adoption by existing customers. Alphabet Inc. (NASDAQ:GOOGL) is one of the best video conferencing stocks to buy according to analysts.
Cooper Investors Global Equities Fund (Hedged) stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2024 investor letter:
“Alphabet Inc.’s (NASDAQ:GOOGL) operating performance remains strong with sales growing 14% in the most recent quarter. Highlights included the ongoing secular growth of digital advertising driving Google search (+14%), YouTube’s continued success as a leading content platform (+13%) and the performance of the Cloud business (+29%). In conjunction with this strong sales momentum, Alphabet’s increased focus on expenses is delivering margin expansion such that Operating Income grew 26%.
Despite this operational momentum, Alphabet’s share price declined 11% in the quarter as a federal judge ruled against the company in its case with the US Department of Justice. The case pertains to Google’s monopolisation of both the search and digital advertising markets which is claimed to limit competition and innovation and/or in
Potential remedies include prohibiting exclusive agreements which make Google the default search engine on Apple or Samsung devices, forcing Alphabet to share its advertising technology with rivals, or in the extreme breaking the company apart. The timing and outcomes remain somewhat uncertain however we remain of the belief that at the fundamental level Alphabet’s products are best of breed across several verticals and are benefitting from secular industry trends and that these factors will be the ultimate determinant of long-term shareholder returns.”
1. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Analysts Upside Potential: 29.72%
Adobe Inc. (NASDAQ:ADBE) is a leading global technology company based in the United States, primarily known for its innovative software solutions that enhance digital experiences across various platforms. The company operates through three main segments: Digital Media, Digital Experience, and Publishing and Advertising.
One of the company’s key offerings related to video conferencing is Adobe Connect, a robust web conferencing platform designed for online meetings, webinars, and eLearning sessions. The software supports unlimited webcam streams at DVD quality, allowing participants to engage in face-to-face collaboration. The platform also enables users to share various content types, including presentations, videos, and audio files, without requiring additional downloads.
Adobe Connect falls under the Digital Experience segment of Adobe Inc. This segment focuses on providing tools and solutions that help businesses create, manage, and optimize customer experiences across various digital platforms. The company released its third-quarter results for fiscal 2024 on September 12. The results highlighted that the Digital Experience segment revenue of the company improved 10% year-over-year to reach $1.35 billion. Moreover, the subscription revenue for the segment was also a success as it improved by 12% during the same time to reach $1.23 billion.
Talking about the overall performance of Adobe Inc. (NASDAQ:ADBE), the company achieved a total revenue of $5.41 billion. up 11% year-over-year. Moreover, the GAAP operating income for the company was $1.99 billion.
It ranks as the best video conferencing stock to buy according to analysts.
Polen Global Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q2 2024 investor letter:
“With Adobe Inc. (NASDAQ:ADBE), in some ways, we see it as a microcosm of the market’s “shoot first, ask questions later” approach to categorizing AI winners and losers. In the early part of last year, Adobe came under pressure with a perception that generative AI (GenAI) would represent a material headwind to their suite of creative offerings. In short order, the company introduced its GenAI offering, Firefly, which shifted the narrative to Adobe as a beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was again challenged as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were robust as the company raised its full-year forecast across a number of key metrics and showcased better-than-expected results.”
While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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