Shares jumped 4.1% to $102.21 Friday after Citigroup raised its price target on Zoom Communications to $122 from $106 and reiterated a Buy rating, citing the company's expanding customer-service software business and its ability to charge for AI-powered tools. Citi pointed to accelerating growth, contact center adoption, and AI as key drivers. The call stands out as tech stocks broadly sell off, suggesting investors are rewarding Zoom-specific catalysts even in a hostile market.
The Contact Center Business Just Crossed a Major Revenue Milestone
Zoom's customer experience division hit $100 million in annual recurring revenue — the yearly value of its subscription contracts — by focusing on resolving customer problems rather than simply routing calls faster.
That business is growing at high double-digit rates, while Zoom Phone passed 10 million seats. For shareholders, this matters because Zoom's core video-meeting business grows in the low-to-mid single digits. The contact center is the only unit with the speed to meaningfully accelerate total revenue, which reached $4.87 billion in fiscal year 2026, up just 4.4%.
Big Customers Are Paying Extra for AI — Not Just Using It Free
Every single one of Zoom's top 10 deals last quarter included paid AI components , and seven of those represented competitive displacements of legacy contact center vendors. Zoom's automated customer-service agent was included in four of those top deals. This proves enterprises will pay for AI that replaces human labor in call centers — a far clearer revenue path than giving away AI meeting summaries for free.
An Activist Investor Is Pressuring for Bigger Returns
Three weeks ago, Spruce Point Capital issued a report arguing Zoom has "well over 100% long-term upside potential."
The firm highlighted that Zoom holds roughly $7.8 billion in net cash and generates close to $2 billion annually in free cash flow , proposing a $4 billion buyback. Insiders, however, have sold $12.7 million in shares over the past three months with zero purchases — a disconnect that tempers the bull case.
The Gap Between Ambition and Valuation
Citi's $122 target implies Zoom is worth about $37 billion — roughly 7.5 times revenue. That's a steep premium for a company still growing under 5% overall. The real question: can the contact center unit, still under 2% of total revenue, scale fast enough to justify that price before the video-conferencing cash cow stalls? Investors are betting on a transformation story — but the math demands execution, not just ambition.