What Happened?
Shares of video communications platform Zoom (NASDAQ: ZM) fell 13.3% in the afternoon session after the company reported fourth-quarter results that missed profit expectations and provided a weak financial forecast for the upcoming year.
While the company's fourth-quarter revenue of $1.25 billion beat analyst estimates, its adjusted earnings per share of $1.44 fell short of expectations. Adding to investor concerns, the company's outlook was mixed. Revenue guidance for the first quarter was largely in line with Wall Street's projections. However, Zoom's full-year adjusted earnings per share forecast missed consensus estimates, signaling potential pressure on future profitability and driving the negative market reaction.
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What Is The Market Telling Us
Zoom’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Zoom and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 4.4% on the news that investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off. The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software companies.
Zoom is down 10.4% since the beginning of the year, and at $74.63 per share, it is trading 22.4% below its 52-week high of $96.22 from January 2026. Investors who bought $1,000 worth of Zoom’s shares 5 years ago would now be looking at an investment worth $199.75.
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