Cathie Wood is Buying These 5 Stocks in September

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

Number of Hedge Fund Holders: 44

Zoom Video Communications, Inc. (NASDAQ:ZM) is a California-based communications company that has featured on the ARK portfolio since the last quarter of 2020. On September 13, Cathie Wood acquired an additional 208,535 shares of Zoom Video Communications, Inc. (NASDAQ:ZM), further strengthening its long-standing stake. 

On September 12, KeyBanc analyst Thomas Blakey initiated coverage of Zoom Video Communications, Inc. (NASDAQ:ZM) with a Sector Weight rating and no price target. He sees CCaaS (Contact Center as a Service) having structural, strategic, and economic upside as compared to current contact center solutions, and believes Zoom Video Communications, Inc. (NASDAQ:ZM) is well-positioned to gain share in the segment. However, he also cited the untested monetization of other services and a contracting online segment for his Sector Weight rating on the stock.

According to Insider Monkey’s data, Zoom Video Communications, Inc. (NASDAQ:ZM) was part of 44 hedge fund portfolios at the end of Q2 2022, compared to 43 funds in the last quarter. Ken Fisher’s Fisher Asset Management is one of the leading stakeholders of the company, with 4.7 million shares worth close to $509 million. 

Here is what Horos Asset Management had to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2022 investor letter:

“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).”