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Better Buy: Zoom Video Communications vs. Microsoft

ZM ER next week after the market closes on Tuesday, June 2.
https://www.fool.com/investing/2020/05/29/better-buy-zoom-video-communication-vs-microsoft.aspx?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article&yptr=yahoo

Since last year's IPO, Zoom Video Communications (NASDAQ:ZM), the new kid on the tech block, has seen its share price rise to levels that rival the stock price of veteran tech titan Microsoft (NASDAQ:MSFT). The popularity of Zoom's videoconferencing platform powers its success.

Microsoft also offers a rapidly growing videoconferencing product, although it's ancillary to the company's core business. This speaks to the demand for videoconferencing in today's connected world, particularly after the coronavirus pandemic required working and schooling from home.

Zoom's success
Zoom's growth has been stellar on all fronts. It has lived up to its name, as revenue zoomed from $60.8 million in 2017 to $622.7 million for this most recent fiscal year, which ended Jan. 31.

Microsoft's strengths
Microsoft, like Zoom, is experiencing tremendous growth across its lines of business. Its Teams videoconferencing unit saw daily active users grow from 44 million in March to over 75 million a month later.

But shelter-at-home requirements didn't just lead to a boom for videoconferencing. Businesses and other institutions require the IT infrastructure to support remote workers, which helped Microsoft achieve 15% year-over-year revenue growth to $35 billion in the company's third quarter (which ended March 31).

Microsoft's cloud computing solutions are what drive the company's revenue today. Organizations in all industries are shifting technology infrastructure to the cloud using vendors such as Microsoft. The cloud computing market tripled in the past three years and is estimated to grow to $163 billion by 2021.