ZM - Anthropic Token Just Dropped

Zoom Communications ($ZM) is a sleeper play on Anthropic eating the world. Yes, that Zoom. Down 80% since 2021, the core business is attractive and reasonably cheap: it is now cheap on FCF, buying back stock, and seeing re-acceleration in its business with AI tools; the upside kicker is that you also get a multi-billion dollar and growing investment in Anthropic. A real AI-winner. Back then ZM was a $550 stock in 2021, that Cathie Wood had a $1500 price target on. It grew rapidly during the pandemic, traded at a high sales multiple. A COVID winner, the stock has since collapsed but the core of it is that it is still a verb and has a large installed base, high margins, steady growth, and trades at <10x FCF.  The sexy part of the story for ZM is that it also owns a multi-billion stake in Anthropic at last valuation on its books, which is will keep growing with each inevitably higher fund-raise and into the IPO. Claude Code, Cowork, Opus 4.5 have reached escape velocity, and every new model or integration that is dropped increases adoption for this scarce asset. The company has been relatively quiet about this investment (except for Zoom Ventures' 2023 annual review). On the next earnings call, analysts will ask about it. More bulge-bracket coverage will incorporate the Anthropic stake in their analysis. The company has increased its buyback capacity since November. I expect fireworks on the earnings call. An investment in Zoom allows you to front-run each Anthropic raise into the IPO. Is this a $1 trillion asset? $2 trillion?  TINA  (There Is No other Anthropic.) See Echostar (SATS) after the SpaceX announcement. Maybe Cathie Wood wasn't wrong, just early (she was probably wrong on her thesis, but doesn't mean zoom is done) Meta or Salesforce could snap up the company as well- financially accretive with a lot of strategic value. Millions of consumer and enterprise users, immense unstructured data, and a nominative referent (Zoom is still the verb of choice for video conference) The TLDR: before the backup info is that you get a solid steady company at a good price that is reaccelerating growth coupled with a multi-bn sized investment in Anthropic that could be worth a lot more than its book value is now - Anthropic is currently positioned as the AI winner in b2b - if you want exposure to it, this is a great way to participate In May 2023, it made an \~$51m investment in Anthropic's Series C round at $4.1bn valuation (owning roughly 1.2% of the company.) We can estimate this from the 10-Qs subsequently filed at the time, and Anthropic's announcement. [https://www.anthropic.com/news/anthropic-series-c](https://www.anthropic.com/news/anthropic-series-c) [https://www.sec.gov/ix?doc=/Archives/edgar/data/1585521/000158552123000194/zm-20230731.htm](https://www.sec.gov/ix?doc=/Archives/edgar/data/1585521/000158552123000194/zm-20230731.htm)  At the recently reported upsized Sequoia/Coatue GIC $350bn Anthropic round, this would value the stake at \~$2-4bn depending on dilution Two smaller sell-side research firms (Baird and Wedbush) have estimated this, but the rest of the analyst community hasn't updated this asset value or the lower enterprise value  This week RBC sifted through the software universe for stocks insulated from AI narrative, acquisition targets, and have an idiosyncratic element. They picked ZM as a resilient name, cheap on FCF, inflecting AI-led acceleration, but didn't mention the key Anthropic holding [https://www.ark-invest.com/articles/valuation-models/arks-zoom-model](https://www.ark-invest.com/articles/valuation-models/arks-zoom-model)