Why Zoom Stock Rose Today

What happened 

Shares of Zoom Video Communications (NASDAQ:ZM) climbed on Thursday, as COVID-19 case counts surged across the U.S. As of 2:35 p.m. EST, Zoom’s stock was up more than 4%. 

So what 

More than 140,000 new COVID-19 cases were recorded in America on Wednesday alone, according to a CNBC analysis of data compiled by Johns Hopkins University. Worse still, hospitalizations are mounting quickly. Health officials, in turn, are warning that the country’s already strained medical infrastructure could soon be stretched thin. 

To slow the spread of COVID-19, governors in several states imposed new restrictions on bars, restaurants, and other large gatherings. Meanwhile, Dr. Michael Osterholm, a coronavirus advisor to President-elect Joe Biden, said a second national lockdown of four to six weeks could be needed to control the coronavirus until a vaccine is available. 

A person is pointing to an upwardly sloping line that's above a downwardly sloping line.

Zoom Video Communications’ stock rose on Thursday even as the markets fell. Image source: Getty Images.

These alarming trends are once again driving investors to seek shelter in Zoom’s stock. Demand for the cloud-based video communications platform’s services could rise sharply if more lockdowns are enacted.

Now what

Zoom’s business has expanded at a torrid clip during the pandemic. Its revenue soared 355% to $663.5 million in the second quarter, while its adjusted net income rose more than tenfold to $274.8 million. 

With the COVID-19 crisis looking as if it will get worse before it gets better — and with the prospect of more lockdowns on the horizon — demand for Zoom’s video technology should continue to grow.

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