Zoom’s Guidance Misses Expectations; Shares Plunge Nearly 4% in After-Hours Trading — BigGo Finance

Video conferencing software giant Zoom Communications (ZM.US) reported its latest earnings on the 25th, with second-quarter revenue and profit both beating market expectations. However, its third-quarter profit outlook fell short of Wall Street estimates, signaling that even Zoom’s aggressive push into AI features has not been enough to fully fend off competitive threats from Microsoft Teams and Google Meet, dragging shares down nearly 4% in after-hours trading.

Zoom’s second-quarter revenue reached $1.28 billion (approximately NT$41 billion), beating market expectations of $1.27 billion. Adjusted earnings per share came in at $1.55 (approximately NT$49), also exceeding analysts’ forecast of $1.48.

However, the guidance disappointed investors. Zoom projected third-quarter revenue between $1.275 billion and $1.28 billion, with the upper end of the range only barely matching the $1.28 billion consensus estimate compiled by LSEG. Adjusted earnings per share were guided to $1.46 to $1.48, notably below the market expectation of $1.50.

Zoom shares fell 3.73% in regular trading on the 25th to close at $100.92, then dropped another 3.98% in after-hours trading to $96.90.

AI Push Struggles Against Bundled Software Competition

Zoom has been actively expanding its AI product portfolio, including the agentic AI tool “AI Companion,” AI Receptionist, and the enterprise-grade API “Zoom AI Services” designed for businesses, aiming to boost user stickiness and open up new revenue opportunities.

But market observers point out that Teams and Meet are typically included in Microsoft 365 and Google Workspace subscription plans, while some of Zoom’s AI features require separate payment. This puts Zoom at a disadvantage in price competition. Enterprise customers can already access video conferencing capabilities within their existing productivity suites, leaving relatively limited incentive to switch to Zoom.

Market Turns Attention to Nvidia Earnings

Elsewhere, Wall Street is holding its breath for Nvidia’s (NVDA-US) latest quarterly earnings report. Chip stocks rose on the 25th, with Nvidia shares snapping a seven-session losing streak to close up approximately 2.19%. The sell-off had marked the stock’s longest losing streak since 2022.

According to Bloomberg analyst consensus estimates, Nvidia is expected to report adjusted earnings per share of $2.09 (approximately NT$67) for the second quarter, with revenue of $92 billion (approximately NT$2.9 trillion), representing 96% year-over-year revenue growth with continued quarter-over-quarter acceleration. Data center revenue is expected to surpass $85.4 billion, up 107% year-over-year.

Nvidia still derives the majority of its revenue from hyperscale cloud service providers such as Amazon, Google, and Microsoft. However, these companies are all developing their own chips to reduce dependence on Nvidia, or selling their in-house chips to third-party customers, which could pose headwinds for Nvidia in the future.

Earlier this month, Nvidia announced it is partnering with BlackRock, Blackstone, KKR, Apollo, Brookfield, and Goldman Sachs to establish a $500 billion (approximately NT$15.9 trillion) financing program, a move that would make Nvidia’s GPUs potentially securitizable.