Zoom stock rallies to $112 on AI-driven enterprise pivot and Anthropic IPO speculation, but valuation premium raises caution.

Zoom's enterprise revenue grew 7.2% year-over-year to $755.7 million in Q1 FY27, with AI Companion paid users surging 184%. Paid AI features were included in 9 of the top 10 Customer Experience (ZCX) deals, and the company generated $500.5 million in quarterly free cash flow.

The stock now trades at 18.4 times forward expected earnings of $6.04 per share—a 36% premium over its four-year average forward P/E of 13.5 times. Meanwhile, the Enterprise Net Dollar Expansion Rate sits at 99%, showing churn and downgrades still narrowly outpace expansion revenue.

Microsoft's competitive inclusion of Teams within its enterprise suite creates persistent pressure on Zoom's pricing power. Legacy Online revenue growth remained sluggish at 2.8%, and average monthly churn increased to 3.0%, indicating structural headwinds in the core business.