Last Update: February 28, 2023, 14:35 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 profit that topped Wall Street estimates, sending the company’s shares up 8% in extended trading.
(Reuters) – Zoom Video Communications Inc said on Monday it would integrate more artificial intelligence into its products and forecast annual profit that topped Wall Street estimates, sending the company’s shares up 8% in extended trading.
Analysts predict AI technology will be a key driver for the future growth of the tech industry, which is grappling with slowing demand amid fears of a recession.
The AI race accelerated last year after Microsoft-backed OpenAI’s ChatGPT saw giants from Alphabet Inc to China’s Baidu Inc announce their own offerings.
RBC analyst Rishi Jaluria said, “I love that Zoom is actively talking about these opportunities today and I sincerely believe it’s necessary, especially as Microsoft already offers ChatGPT for Teams Premium.” Incorporating as part of.”
San Jose, California-based Zoom forecast fiscal 2024 profit of between $4.11 and $4.18 per share, compared with analysts’ average estimate of $3.66 per share, according to Refinitiv data.
“The age of AI and the big language model has come,” CEO Eric Yuan said during a call with analysts, adding that AI can “really help” the company.
Zoom is also benefiting from the ongoing shift to a hybrid work model and steady demand for its video-conferencing service to cut costs. Earlier this month, it announced about 15% reduction in its workforce.
On an adjusted basis, Zoom earned $1.22 per share for the fourth quarter ended January 31, beating estimates of 81 cents per share.
Revenue rose 4% to $1.12 billion, which topped analysts’ average expectation of $1.10 billion.
Finance chief Kelly Steckelberg said the growth was primarily driven by strength in Zoom’s enterprise business.
However, the company expects 2024 revenue to be between $4.44 billion and $4.46 billion, well below the average Street estimate of $4.60 billion.
“The revenue outlook is softer than initially expected, partly due to macro pressures and especially the decline in online business,” Jaluria said.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)