As the market continues to stabilize, it is creating a favorable backdrop for tech stocks like Zoom, which have been under pressure but are now showing signs of recovery. Zoom’s aggressive push into AI, highlighted by the rapid adoption of AI Companion 2.0, alongside strong enterprise growth and an attractive valuation, positions it as a compelling opportunity for a rally. With the stock exhibiting signs of a bearish to bullish trend reversal, this is an optimal setup to add bullish exposure. Trade Timing The timing for adding bullish exposure to ZM is ideal, as the stock has recently broken above a bearish trendline signaling a potential reversal. Combined with ZM outperforming the S & P 500 and momentum shifting to the upside, this breakout suggests a rally toward $90, making this an attractive entry point with a strong risk-to-reward profile. ZM trades at a significant discount to its industry despite superior profitability metrics compared to its industry, making it an undervalued tech name in a recovering market. Forward PE Ratio: 14.3x vs. Industry Median 26.4x Net Margin: 22% vs. Industry Median 10% Bullish Thesis AI-Driven Growth : Zoom’s AI Companion saw a 59% increase in monthly active users, with AI Companion 2.0 and industry-specific AI customization announced at Zoomtopia. Enterprise Momentum : Enterprise revenue grew 5.9% YoY in Q4 FY2025, with major wins like a 20,000-seat Zoom Contact Center deal in EMEA and Workvivo’s largest deal with a Fortune 10 company. Attractive Valuation : ZM’s valuation of 14x forward earnings is significantly below the industry median of 26x, offering a compelling entry point for a high-quality tech name with superior profitability. Technical Breakout : The breakout above the $74 descending trendline resistance, with an upside target of $90, signals a potential rally as momentum shifts to the upside. Options Trade To capitalize on ZM’s potential upside, I’m buying a June $75/$80 Call Vertical @ $2.27 Debit. This entails: Buying the June $75 call @ $5.85 Selling the June $80 call @ $3.58 The maximum reward is $273.00 if ZM is above $80 at expiration. The maximum risk is $227.00 if ZM is below $75 at expiration. The breakeven point for this trade is $77.27. View this Trade with Updated Prices at OptionsPlay This strategy positions you to benefit from ZM’s anticipated rally, leveraging its technical breakout, leadership in AI, and strong enterprise growth to profit from a high-quality tech name with defined risk. With ZM’s undervalued fundamentals and favorable macro tailwinds, this call vertical offers a compelling opportunity to capture upside potential in a recovering market. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
