US software stocks have endured a brutal valuation reset in early 2026.
Protracted inflation data and shifting interest rate expectations, especially amidst the Iran conflict, have severely compressed forward multiples, prompting investors to rotate out of high-beta cloud names.
Still, Ritholtz’s chief executive Josh Brown hasn’t thrown in the towel on all of them. There’s still one hidden gem he’s still bullish on – Zoom Communications Inc (NASDAQ: ZM).
Here are Brown’s three big reasons to remain constructive on ZM shares that’re already trading at a 52-week high.
Anthropic investment: major positive for Zoom stock
Josh Brown’s view on Zoom shares is partly anchored in the underappreciated value embedded within the firm’s strategic investment in the artificial intelligence (AI) research lab – Anthropic.
In 2023, the company’s corporate venture capital arm parked roughly $51 million in Anthropic, a stake Wall Street analysts believe could now be worth as much as $4 billion.
And that is likely not the peak either. Recent reports suggest Anthropic is laying the groundwork for an initial public offering (IPO) at a valuation of more than $900 billion, potentially as early as October 2026.
This would position it to leapfrog OpenAI as the world’s most valuable private AI firm – making Zoom Communications much more attractive as an AI-leveraged growth story in the process.
Balance sheet strength makes ZM shares attractive
In a restrictive macroeconomic environment where debt servicing costs continue to erode the profitability of unprofitable software names, ZM stock appears attractive due to the company’s robust liquidity profile.
Zoom concluded its fiscal 2026 with a staggering $7.8 billion in cash and marketable securities – against absolutely no long-term debt obligations.
This helped the Nasdaq-listed firm generate an impressive $1.9 billion in full-year free cash flow, representing a 6.4% increase year-over-year.
ZM management is aggressively deploying this capital to boost shareholder value – the company expanded its buyback plan by a whopping $1 billion in November 2025.
This makes up for Brown’s second reason to remain positive on Zoom Communications.
Technicals warrant investing in Zoom Communications
Finally, the technical profile for ZM shares has undergone a dramatic transformation, shifting from a “messy” laggard caught in the SAASmageddon sell-off to a momentum leader.
After breaching its 200-day moving average (MA) in February, the stock bottomed near $74 before staging a powerful recovery that culminated in a breakout above the “psychologically significant” $100 level.
This move, supported by meaningful volume, has pushed Zoom’s relative strength index (RSI) to 77, indicating intense buying pressure.
Crucially, the 50- and 200-day MA have converged around $83, creating a dense floor of support.
According to Josh Brown, this zone represents the ultimate pivot point to define risk in a “newly” confirmed uptrend in San Jose-headquartered Zoom Communications Inc.
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