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Zoom Communications' Tiered AI Strategy Seen as Key Driver of Future Growth, RBC Says

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Zoom Communications' (ZM) tiered artificial intelligence strategy could drive higher customer spending and accelerate growth, RBC Capital Markets said in a note emailed Tuesday.

The analysts said that after holding investor meetings with Zoom's Head of IR, Charles Eveslage, they have a better understanding of how the company is monetizing AI across three tiers.

The first layer includes core AI features such as meeting summaries and My Notes at no additional cost to reduce customer churn and differentiate the platform from Microsoft (MSFT) Teams. The second layer is ZoomMate, a horizontal AI offering priced at about $20 per user per month, providing AI-powered search across Zoom and third-party applications, workflow automation, and content creation. The third layer consists of higher-priced, persona-specific AI products, the analysts said.

The analysts said they like this framework because it creates a clear upgrade path from free AI that reduces churn, to paid AI that increases revenue per user, to specialized AI products that drive greater spending across enterprise departments.

"We continue to believe the platform evolution remains underappreciated by investors even as revenue growth remains in the mid-single digits," they added.

RBC maintained its outperform rating and $130 price target on Zoom Communications.

Price: $85.55, Change: $-0.59, Percent Change: -0.68%

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