Snapshot
- Ticker: ZM (Nasdaq)
- Bucket: Software in the AI Crosshairs
- Q1 2026 position: $105.8M common (1,315,605 shares, 2.11% of 13F) — new position
- HQ: San Jose, CA
- Business: Video-first unified communications and customer-experience platform (Meetings, Phone, Contact Center) with a federated AI assistant, AI Companion
Business Overview
Zoom — renamed from Zoom Video Communications to Zoom Communications in late 2024 to signal the platform ambition — has settled into a low-growth, very-high-margin steady state. Fiscal 2026 (ended January 31, 2026) revenue was 2,934.1M up 6.5% and customers spending over $100K/year up 9.3%. GAAP operating margin was 23.1% (up 570bps YoY) and non-GAAP operating margin 40.4%; the company carries a multi-billion-dollar net cash position and buys back stock.
The growth story inside the flat top line is AI and CX. AI Companion — bundled free at first, now monetized via a Custom AI Companion add-on — saw paid users grow 184% YoY in FY2026, and the “My Notes” agentic note-taking product reached 1.5M licensed users within four months of launch. Zoom Contact Center / Customer Experience continued accelerating high double-digit growth, taking share from legacy contact-center vendors with an AI-native pitch. The bear case is equally clear: Microsoft Teams is bundled into E5 licenses, core Meetings is saturated, and online (SMB/consumer) revenue is roughly flat.
Financial Trajectory
| Period | Revenue | Growth | Margin notes |
|---|---|---|---|
| FY2025 (ended Jan 2025) | ~$4.67B | +3% | non-GAAP op margin ~39% |
| FY2026 (ended Jan 2026) | $4.87B | +4.4% | GAAP op margin 23.1%; non-GAAP 40.4% |
| FY2026 Enterprise | $2.93B | +6.5% | >$100K customers +9.3% |
AI Companion paid users +184% YoY in FY2026 (off a small base; Zoom does not disclose AI revenue separately).
Why Atreides Owns It
Zoom is a brand-new Q1 2026 position, initiated alongside Palo Alto and Akamai in the same quarter — a coordinated rotation into AI-defensible software after Baker’s December 2025 Invest Like the Best framework: SaaS faces a “life or death decision” about sacrificing margin to ship AI agents, and “anything you can verify, you can automate.” Zoom fits the survivor template on three counts. First, it has already made the margin sacrifice — AI Companion was given away free to its installed base, funded by 40% operating margins, and is only now being monetized with demonstrated uptake (184% paid-user growth). Second, Zoom owns distribution and proprietary data (meetings, calls, contact-center interactions) that an external agent cannot easily replicate — the conversation itself is the context. Third, the valuation embeds the bear case: low-to-mid teens earnings multiple net of cash, with a buyback, meaning Atreides is paying roughly value-stock prices for a free option on agentic CX and AI monetization.
It is a characteristically contrarian entry — Zoom is the consensus example of post-COVID SaaS decay, and Atreides is betting the market is mispricing a cash machine that is navigating the AI transition better than the multiple implies. At 2.11% of the 13F it is sized as a position, not a flyer, but with no options overlay and one quarter of history, conviction is still being established.
Position History
| Quarter | Type | Shares/Notional | Value | % of 13F |
|---|---|---|---|---|
| Q4 2024 | — | not held | — | — |
| Q1 2025 | — | not held | — | — |
| Q2 2025 | — | not held | — | — |
| Q3 2025 | — | not held | — | — |
| Q4 2025 | — | not held | — | — |
| Q1 2026 | Common | 1,315,605 | $105,761,486 | 2.11% |
A clean new entry at ~$80/share implied cost basis, part of the Q1 2026 software-sleeve rotation that brought in Zoom, Palo Alto Networks, and Akamai while GitLab was exited entirely. Nothing yet to interpret beyond the initiation itself: this is a first-quarter position that will need a second filing to reveal whether it is a core holding or a trade.
Risks
- Core Meetings is a saturated, commoditized market; Microsoft Teams bundling remains a permanent structural headwind, and 4% growth leaves no margin for execution error.
- AI meeting agents could commoditize the meeting layer itself — if note-taking, scheduling, and summarization agents become model-provider features, Zoom’s AI Companion differentiation erodes.
- AI Companion monetization is early and small relative to a $4.9B revenue base; the 184% growth is off a low denominator.
- Contact Center competes against entrenched incumbents (NICE, Genesys, Five9) and aggressive AI-native startups simultaneously.
- A value-priced stock can stay value-priced: without growth re-acceleration, the position’s return depends largely on buybacks and multiple maintenance.