Zoom Communications, Inc. is positioned as a potential candidate for the S&P 500 Index, with Insider Monkey identifying the company among nine new contenders. The video-meetings provider, currently valued at approximately $28 billion, meets the structural requirements for index inclusion and trades at a discount relative to its peers. The stock is priced at near 9 times trailing earnings and about 15 times next year's expected profit, metrics that Insider Monkey describes as remarkably low for a profitable software firm.
The company’s balance sheet strengthens its case for inclusion, holding roughly $7.2 billion in net cash, which represents close to a quarter of its market value. This financial position suggests the market is pricing Zoom as a business with limited growth prospects. Despite this valuation, Zoom has beaten Wall Street earnings estimates in 17 of the past 18 quarters, a track record that underscores its operational stability. The firm is currently executing a strategy to transform from a pandemic-era utility into an AI-first work platform, expanding its offerings to include phone, chat, scheduling, and contact-center tools via its AI Companion assistant.
While the low multiple makes Zoom an attractive value proposition, the bear case centers on stagnant growth. The core meetings business is expanding only in the low single digits, leading many investors to view the company as a pandemic winner whose peak performance has passed. This perception keeps a lid on the valuation multiple and may deter the S&P 500 committee from adding the stock when a seat opens, as faster-growing companies often take precedence in a deep pool of eligible names. The stock returned 8.34% over the last six months, lagging the Insider Monkey Billionaire Index, which gained 11.6% during the same period.
Positioning data indicates a shift in sentiment among institutional investors. Insider Monkey's database shows that 71 hedge funds held Zoom Communications shares at the end of the second quarter of 2026, an increase from 60 funds in the previous quarter. This rise suggests that value-minded investors are warming to the profitable story despite the slow growth rate. The central question remains whether the committee will prioritize Zoom's eligibility and low valuation over its modest expansion rate.
If the AI-platform shift successfully rekindles growth, the current cheap multiple could be viewed as a bargain in hindsight. Conversely, if meetings continue to crawl, the stock may remain inexpensive for an extended period. While Insider Monkey acknowledges Zoom's investment potential, the publication notes that certain AI stocks offer greater upside potential and carry less downside risk. The firm also highlights other opportunities in its coverage of affordable stocks and S&P 500 contenders.