Zoom Video Communications Inc. soared to a record on Friday with a rally in the last hour of trading helping the company close with a market value above $50 billion for the first time.
The maker of video conferencing software rose 9.7 per cent to US$179.48, giving it a market value of US$50.6 billion, bigger than tractor maker Deere & Co. and pharmaceutical company Biogen Inc. While there was no clear reason for the steep rise, technology stocks were the best performing group in the S&P 500 Index, and investors may be positioning ahead of Zoom’s earnings report expected on Tuesday.
San Jose, California-based Zoom has gained more than 160 per cent this year as investors bet that soaring usage amid the coronavirus pandemic would translate into long-lasting revenue growth. The stock now trades at an eye-watering 55 times estimated revenue compared with an average of 7 times for software and services stocks in the S&P 500.
Eric Yuan, Zoom’s founder and chief executive officer, saw his net worth rise by more than $800 million on Friday to $9.3 billion, according to the Bloomberg Billionaires Index.