Zoom's 'hidden gem' investment in Anthropic could be worth $2 billion to $4 billion, analysts say

Shares of Zoom surged by 11% on Monday following a report from analysts at Baird, who projected that the company's stake in the AI startup Anthropic might be valued between $2 billion and $4 billion, contingent on dilution factors. This investment was part of a broader partnership announced in May 2023, during which Zoom Ventures confirmed its financial backing of Anthropic. While the exact amount of the investment remains undisclosed, Zoom's recent filing with the U.S. Securities and Exchange Commission revealed that the company made $51 million in 'strategic investments' during that quarter. Baird’s analysts speculate that a significant portion, if not all, of this investment was directed towards Anthropic. With Anthropic currently valued at $350 billion, this could result in a staggering return of approximately 78 times what Zoom invested. The analysts noted, 'While we (and the market) have been primarily focused on ZM's ability to gradually reaccelerate revenue growth and capture AI opportunities, the quieter, hidden gem might be its $51 million investment in Anthropic in 2023.' Zoom initially gained immense popularity during the COVID-19 pandemic, as many turned to its video conferencing services to maintain connections with colleagues and loved ones. However, as restrictions eased and normalcy returned, Zoom’s stock has seen a decline from its peak values. Baird’s analysts suggest that the investment in Anthropic could represent a significant upside for Zoom. They stated, 'ZM is literally invested in Anthropic's Claude success, and as rumors of an Anthropic IPO intensify, this investment could become even more crucial.'