According to CNBC, shares of Zoom surged 11% on Monday after analysts at Baird released a note estimating the company’s 2023 investment in AI startup Anthropic could be worth between $2 billion and $4 billion. The analysts believe all, or most, of the $51 million in “strategic investments” Zoom reported in May 2023 went to Anthropic. Given Anthropic’s current $350 billion valuation, that stake could represent a return of roughly 78 times Zoom’s initial outlay. The analysts called the investment a “hidden gem” that has been overshadowed by focus on Zoom’s core business growth. This potential windfall comes as Zoom’s stock has struggled since its pandemic highs, with the company announcing the partnership and investment over a year ago.
The Hidden Gem That Saves a Stock?
Here’s the thing: this analysis feels like a classic case of Wall Street looking for *any* good news to latch onto. Zoom’s core video conferencing business has been in a tough spot post-pandemic. The stock is down massively from its peak. So a story about a speculative, non-operational investment suddenly being worth billions? That’s a powerful narrative to drive a short-term pop.
But let’s pump the brakes a bit. A 78x return sounds incredible, almost too good to be true. It all hinges on Anthropic’s sky-high $350 billion valuation holding up through an eventual IPO or other liquidity event. And we’ve seen how volatile private AI valuations can be. Remember, this isn’t cash in Zoom’s pocket yet. It’s paper gains based on a private market number that could change.
More Than Just a Lottery Ticket
Now, to be fair, this probably wasn’t *just* a financial gamble. That $51 million likely bought Zoom more than just equity; it bought a deep partnership with one of the leading AI labs. Integrating Claude’s AI into Zoom’s platform is the real strategic play here. The financial upside is a potential bonus. So in that sense, even if the return is “only” 10x or 20x, it was a smart move. It’s a hedge and a partnership bundled into one.
But the big question is: what does this say about Zoom’s own innovation engine? Does a wildly successful investment in *another* company highlight a lack of homegrown, blockbuster AI products? It’s a bit like a car company’s stock soaring because it invested in a winning lithium mine—it helps the balance sheet, but does it fix the underlying challenges with the cars?
A Windfall Won’t Fix the Core Problem
Ultimately, a $4 billion payoff would be a fantastic liquidity event for Zoom. It would give them a massive war chest for buybacks, acquisitions, or just weathering a storm. But it doesn’t automatically make Zoom IQ a better product, or win back market share from Microsoft Teams. It’s a one-time boost, not a recurring revenue stream.
So while Monday’s stock jump is understandable, long-term investors should care more about what Zoom does with its core platform. The Anthropic cash could provide a cushion, but the company still has to execute on its own. Otherwise, this “hidden gem” will just be a shiny story masking the same old problems.
