ZoomThe Trade Desk

Zoom vs The Trade Desk

This page compares Zoom Video Communications Inc and The Trade Desk, Inc. - Class A Shares, examining business models, financial performance, and market context in a neutral, accessible way. It presen...

Why It's Moving

Zoom

Zoom Surges on Earnings Beat and Buyback Momentum as Analysts Eye Upside

  • Q3 earnings delivered $1.52 EPS versus $1.44 expected, with $1.23B revenue up 4.4% YoY, beating forecasts by $15M and highlighting Enterprise segment strength at 6% growth.
  • Completed $2.38B buyback of 32.5M shares (10.6% of outstanding), boosting EPS while raised FY2026 guidance to $5.95-$5.97 EPS underscores sustained profitability.
  • Analysts mixed but optimistic: Consensus Hold with $92 average target (12% upside), rising estimates (8 upward revisions), and Buy ratings citing AI Companion and low churn.
Sentiment:
🐃Bullish

Which Baskets Do They Appear In?

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Investment Analysis

Zoom

Pros

  • Zoom has pivoted decisively towards AI, launching agentic features that differentiate its platform in the competitive collaboration market and drive user growth.
  • The company maintains robust profitability and cash flow, with a GAAP operating margin expansion and over $7 billion in cash and marketable securities for strategic flexibility.
  • Zoom’s product suite extends beyond video conferencing to include unified communications, contact centre, whiteboard, and team chat, broadening its addressable market and customer stickiness.

Considerations

  • Revenue growth has slowed markedly post-pandemic, reflecting saturation in core markets and intensifying competition from larger tech peers with deeper resources.
  • The stock remains volatile, with performance heavily tied to the uncertain evolution of remote work trends and potential market share shifts.
  • Zoom does not pay a dividend, opting instead to reinvest all earnings, which may limit appeal to income-focused investors.
The Trade Desk

Pros

  • The Trade Desk is a clear leader in programmatic advertising, with a neutral, independent platform attractive to advertisers seeking alternatives to walled gardens.
  • Accelerated product innovation, particularly in AI-driven tools, underpins revenue growth targets and positions the company at the forefront of ad tech evolution.
  • The business model benefits from high operational leverage, with revenue scaling efficiently against relatively fixed technology infrastructure costs.

Considerations

  • The stock trades at a high price-to-earnings ratio, reflecting lofty growth expectations that may be vulnerable to macroeconomic or digital ad spending downturns.
  • Recent share price volatility has been pronounced, with the stock still well below its 52-week high, suggesting ongoing investor uncertainty.
  • The Trade Desk relies heavily on the health of the global digital advertising market, which is cyclical and sensitive to broader economic conditions.

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