Last updated: February 28, 2023, 2:35 PM IST
Zoom is going to bring AI to its products
Zoom Video Communications Inc said Monday it will integrate more artificial intelligence into its products and forecast annual earnings higher than Wall Street estimates, driving shares of the company up 8% in extended trading.
(Reuters) -Zoom Video Communications Inc said on Monday it will integrate more artificial intelligence into its products and forecast annual earnings higher than Wall Street estimates, sending shares of the company up 8% in extended trading .
Analysts predict that AI technology will be a key driver of future growth for the tech industry, which is struggling with declining demand amid recession fears.
The AI race gained momentum after Microsoft-backed OpenAI’s ChatGPT last year prompted heavyweights from Alphabet Inc to China’s Baidu Inc to announce their own offerings.
“I like that Zoom is proactively talking about these opportunities today and I honestly believe it is necessary, especially given that Microsoft is already including ChatGPT as part of Teams Premium,” said RBC analyst Rishi Jaluria.
San Jose, Calif.-based Zoom forecasts FY 2024 earnings of between $4.11 and $4.18 per share, compared to the median analyst estimate of $3.66 per share, according to data from Refinitiv.
“The era of AI and large language models has arrived,” Chief Executive Eric Yuan said while talking to analysts, adding that AI can “really help” the company.
Zoom is also benefiting from steady demand for its video conferencing service through the continued shift to hybrid working models and cost savings. Earlier this month, it announced a headcount cut of about 15%.
On an adjusted basis, Zoom earned $1.22 per share for the fourth quarter ended Jan. 31, compared to estimates of 81 cents per share.
Revenue grew 4% to $1.12 billion, above average analyst expectations of $1.10 billion.
Chief Financial Officer Kelly Steckelberg said the growth was primarily driven by the strength of Zoom’s business.
However, the company expects revenue between $4.44 billion and $4.46 billion for 2024, below the average Street estimate of $4.60 billion.
“Revenue outlook is softer than initially expected, partly due to macroeconomic pressures and especially given declining online sales,” said Jaluria.
Read all the latest technical news here
(This story has not been edited by News18 staff and was published from a syndicated news agency feed)
