Zoom (ZM) Stock Gains 6.2% — What’s Behind the Software Rally?

TLDR

• Zoom stock closed up 6.2% at $78.06 on March 4, driven by a broader software sector rally
• The software ETF (IGV) outperformed the Nasdaq by 9% in the preceding week
• Morgan Stanley flagged a shift in investor focus toward software companies offering practical AI solutions
• Varenne Capital Partners opened a new $1.56 million position in ZM in Q3
• Institutional ownership stands at 66.54%, but insiders have been net sellers — offloading 183,089 shares in the last 90 days

Zoom stock posted a 6.2% gain on March 4, closing at $78.06, as a wave of buying swept through the software sector.

Zoom Communications, Inc., ZM

The move wasn’t driven by any Zoom-specific news. It came as part of a wider rotation into software stocks.

The broader software ETF (IGV) beat the Nasdaq by 9% in the week prior. That kind of outperformance tends to pull along names like Zoom that had been underperforming.

Morgan Stanley pointed to a shift in investor thinking. Rather than betting broadly on AI hype, investors appear to be zeroing in on software companies that deliver practical, secure solutions for enterprise customers.

The firm noted that AI adoption in business is concentrating around specific use cases — software development and information retrieval — suggesting a more mature investment landscape.

For Zoom, the bounce comes just six days after a painful 13.3% drop. That selloff followed Q4 earnings that disappointed on the bottom line.

Fourth-quarter revenue came in at $1.25 billion, beating estimates of $1.23 billion. But adjusted EPS of $1.44 missed the $1.48 consensus. Full-year EPS guidance also came in below Wall Street expectations.

The stock is still down 6.3% year-to-date and sits 18.9% below its 52-week high of $96.22, reached in January 2026.

Institutional Buying Picks Up

Varenne Capital Partners opened a new position in ZM during Q3, picking up 18,848 shares worth roughly $1.56 million. It now ranks as the fund’s 21st largest holding.

Norges Bank made a much larger move, acquiring a new position worth approximately $540 million in Q2. Vanguard increased its stake by 4% in Q3, bringing its total to around 25.94 million shares. Pacer Advisors grew its position by 54.4% in the same period.

Overall, institutional investors now hold 66.54% of Zoom’s outstanding stock.

Insiders Moving the Other Way

While institutions have been buying, insiders have been selling. In the last 90 days, insiders sold 183,089 shares worth roughly $15.75 million.

CEO Eric Yuan sold 73,378 shares on December 16 at an average price of $87.29, netting around $6.4 million. Insider Velchamy Sankarlingam sold 7,568 shares on January 12 at $86.55.

Insiders currently hold 10.78% of the company.

Analyst sentiment is mixed. Out of 27 analysts tracked by MarketBeat, 14 rate ZM a Buy, 12 a Hold, and one a Sell. The average price target sits at $95.32.

Wedbush maintains an Outperform rating with a $95 target. Jefferies has a Buy rating and a $105 target. Wolfe Research upgraded ZM to Outperform in February with a $115 target. Cantor Fitzgerald remains neutral at $87.

ZM’s 50-day moving average is $87.01. Its 12-month low is $64.41. The company carries a market cap of $21.76 billion and a PE ratio of 11.85.

For FY2027, management guided EPS of $5.77–$5.81 and Q1 2027 EPS of $1.40–$1.42.

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