The landscape for U.S. software stocks has recently undergone a severe valuation recalibration as we progress into 2026.
Persistently high inflation figures coupled with evolving perceptions of interest rates—particularly in the context of the ongoing situation in Iran—have significantly compressed forward earnings multiples. This has led investors to pivot away from high-beta cloud enterprises.
However, Josh Brown, CEO of Ritholtz, remains optimistic about certain stocks, particularly highlighting one standout: Zoom Communications Inc. (NASDAQ: ZM).
Here, we outline Brown’s three compelling reasons to maintain a bullish stance on ZM shares, which are currently trading at a 52-week peak.
Investment in Anthropic: A Pivotal Advantage for Zoom
Brown’s enthusiasm for Zoom is significantly rooted in the often-overlooked value embedded in its strategic stake in Anthropic, an artificial intelligence (AI) research laboratory.
In 2023, the firm’s corporate venture capital division invested approximately $51 million (about $65.8 million) in Anthropic, a stake now anticipated by Wall Street analysts to be valued at an astounding $4 billion (roughly $5.2 billion).
This valuation might just be the beginning. Recent sources indicate that Anthropic is preparing for an initial public offering (IPO), potentially at a staggering valuation exceeding $900 billion, possibly as soon as October 2026.
If successful, this would position Anthropic as the most valuable private AI enterprise worldwide, thereby enhancing Zoom Communications’ appeal as a growth avenue augmented by AI.
Financial Robustness Enhances ZM’s Investment Appeal
In an economic climate characterized by rising debt servicing costs, which continue to undermine the profitability of many unprofitable software firms, ZM shares stand out due to their strong liquidity position.
Zoom wrapped up its fiscal 2026 with an impressive $7.8 billion (approximately $10.1 billion) in cash and marketable securities, while carrying no long-term debt.
This exceptional financial standing enabled the Nasdaq-listed company to generate a remarkable $1.9 billion (around $2.5 billion) in full-year free cash flow, reflecting a 6.4% year-over-year increase.
Zoom’s management is proactively utilizing this capital to augment shareholder value, having significantly expanded its buyback initiative by $1 billion (roughly $1.3 billion) in November 2025.
This constitutes Brown’s second rationale for remaining positive on Zoom Communications.
Technical Indicators Favor Investment in Zoom Communications
Lastly, the technical outlook for ZM shares has experienced a notable shift, evolving from a “messy” laggard during the SAASmageddon downturn to a momentum frontrunner.
After surpassing its 200-day moving average (MA) in February, the stock bottomed near $74 before embarking on a vigorous recovery, culminating in a breakout past the significant $100 psychological barrier.
This ascent, accompanied by substantial trading volume, has propelled Zoom’s relative strength index (RSI) to 77, signifying robust buying pressure.
Notably, the convergence of the 50- and 200-day MAs around $83 has established a solid support base.
According to Brown, this region serves as the pivotal point for assessing risk in a “newly” confirmed bullish trend for Zoom Communications, headquartered in San Jose.
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