Why Zoom Stock has jumped today



What happened

Actions of Focus on video communications (NASDAQ: ZM) jumped nearly 10% on Friday amid reports of an increase in coronavirus infections.

So what

The omicron variant is spreading rapidly around the world. Health officials fear the skyrocketing number of COVID-19 cases will soon overwhelm hospitals and other medical facilities.

Companies such as Apple and AlphabetGoogle reacted by delaying its intention to return to its offices. Due to the uncertainty surrounding omicron and this latest wave of COVID-19, many companies are asking their employees to prepare to work from home indefinitely.

Investors took refuge in shares of Zoom Video Communications on Friday. Image source: Getty Images.

Omicron has also fueled a new wave of volatility in financial markets. Stock indices plunged and rallied and plunged again, sometimes on the same day, as health officials shared more news related to the disturbing variant of the coronavirus.

After President Joe Biden warned of “a winter of serious illness and death for the unvaccinated” during a COVID-19 briefing on Thursday, investors appear to be taking the threat posed by omicron even more seriously.

Now what

Many investors responded by buying Zoom shares on Friday. As the sales and profits of countless companies are likely to be dented by a frightening new wave of COVID-19, Zoom could see higher demand for its cloud-based communications solutions.

Zoom experienced tremendous growth during the early stages of the pandemic, when companies quickly rolled out its video chat software so their employees could communicate more easily while working from home. While Zoom is unlikely to return to this scorching pace of expansion, its revenue and profit growth may pick up again in the coming months.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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