Stocks that rise parabolically are appealing. These stocks have made rapid gains. These are difficult to spot ahead.
Even more critical is determining a company's long-term viability. The analyst cannot guarantee that any stock will follow this pattern. In the recent weak market, some AI stocks that rose early in the decade fell.
After the latest stock surge, Zoom Video Communications (NASDAQ: ZM) and Upstart Holdings (NASDAQ: UPST) have improved their operations, raising the likelihood of a comeback. Let's investigate.
Zoom video communication Zoom Video Communications thrived throughout the pandemic. As lockdowns and social distancing hindered in-person connection for people and businesses, tens of millions used the site, and the stock rose.
As we all know, Zoom users returned to pre-pandemic behavior, greatly reducing Zoom's requirement. Microsoft competition also hurt its company and stock. Trades at approximately 90% below its late 2020 peak.
Investors are pleased that Zoom has expanded into a communications ecosystem. Additional services like Zoom phone and Zoom AI Companion may attract more business clients.
With that in mind, Cathie Wood's Ark Invest expects Zoom's share price would rise 23-fold to $1,500 in 2026. A growing webinar/events business and Zoom IQ, a conversational AI product, could also help, Ark Invest believes. Wood thinks Zoom IQ may account for 50% of Zoom's main products' ARPU.
Ark Invest's past aggressive Tesla forecasts came true, so investors shouldn't rule out Ark's accuracy in this scenario.
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