How to buy Zoom shares (ZM)
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This guide explains how to invest in Zoom shares. We explain what you should consider before investing, including a brief history of Zoom, and the top online brokers with which to execute your trades.
Compare the best Zoom trading platforms
If you have already decided to purchase Zoom shares, and you want to do as quickly as possible, click one of the links in the comparison table below. This is our selection of the best places to buy and sell Zoom shares.
How to buy Zoom stock, a step-by-step guide
This is a simple process, even for the most inexperienced investor. The following list explains the steps you need to take to complete your investment.
- Choose a broker. To invest, you need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Zoom shares.
- Place an order for ZM stock. Find the shares section on the website of the platform you have chosen. Then, search for Zoom’s ticker symbol (ZM) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you want and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Zoom shares will be listed in your account. Congratulations, you’ve just bought shares in Zoom! For more information on how to invest in the stock market, explore the Invezz website.
What is Zoom? And should I invest?
Zoom (NASDAQ: ZM) is a leading video communications company. The company was founded in 2011 by former Cisco engineer and executive, Eric Yuan, and 40 engineers formerly of Cisco. Its software was launched in 2013 with the aim of providing videotelephony and online chat services via a cloud-based peer-to-peer software platform. The company’s software has been successfully adopted in both business and personal environments, with uses such as teleconferencing, social interaction and distance education.
The company has gained momentum in recent years, and the impact of COVID-19 on society has been a key catalyst. With social distancing regulations been implemented almost universally, daily meeting participants rose from around 10m in December 2019 to in excess of 300m in April 2020. Zoom’s widespread adoption is further exemplified by active iOS and Android users, rising from around 38,000 at the start of 2020 to over 1.7m in November.
There are some key factors you should consider before investing in Zoom. Ask yourself if the technology sector is something you are familiar with. The company’s business model is predicated upon a four-tier subscription offering for users. Investors should decide if they subscribe to this strategy.
With vaccines now being distributed throughout many countries, will Zoom’s popularity dwindle as social interactions become more feasible? Some feel that Zoom’s rise to prominence may be short-lived, whereas others feel that Zoom has built a solid foundation for future success. It is possible that in the post-pandemic world, some of the shift towards video communication software will be maintained due to its flexibility and economic viability. Some believe the world of work has changed forever.
Before you invest in Zoom, you may want to investigate its competitors. Whilst the video communications sector isn’t saturated, there are alternative companies that offer similar services like Skype and Google Meet. The investment proposition of Zoom is keenly debated. Some have criticised the software for security lapses, and some have praised the ease-of-use on offer. The company’s continued rise appears to suggest that it is heading in the right direction.
How has the company performed in recent years?
Zoom shares have been a top performer in recent years. It has been perhaps the best performing video communications stock, which is especially impressive given its lack of first-mover advantage. The management team has been able to secure the company’s position at the front of the pack.
After raising $100m in Series D funding from Sequoia Capital, Zoom received a $1Bn valuation in January 2017 and was quickly heralded as a unicorn company. After achieving profitability in 2019 by generating $622m of revenue, the company progressed to the next phase of its aggressive growth strategy by conducting an IPO in 2019. On its first day of trading, Zoom’s share price increased by 72%; the company ended the day valued at $16Bn.
Zoom’s share price rose consistently from early 2019 to October 2020 before it started to tail off. Since the turn of the year, Zoom has recommenced its trajectory of growth. With lockdowns continuing around the world, this trend could continue. By joining the NASDAQ-100 stock index on April 30th 2020, Zoom made itself available to a much larger group of investors. Some feel Zoom’s ability to raise capital more easily will be integral to its future success.
Is it a good time to buy Zoom shares now?
Even though vaccines are now being distributed, and the end of the pandemic seems less distant, Zoom appears well-positioned to be integral to companies, educational institutions and families for the foreseeable future. Its fundamentals appear to be strong, and its experienced management team will likely produce more innovations in the future. Consequently, Zoom could be a strong investment for those focussed on the long-term.
Zoom has managed to break away from some of the stalwarts of the video communications space, but if the adoption of video calling continues to gather pace, expect big tech companies to create stiffer competition.
If you would prefer to trade Zoom shares quickly for a profit, technical analysis should be your focus rather than fundamental analysis. You need to be able to read stock charts and spot patterns rather than delving into the company’s foundations. If long-term returns are on your agenda, fundamental analysis will become crucial as you attempt to create a growth thesis to project the future value of Zoom.
Be sure to keep up with the latest news and analysis on our website. We regularly publish in-depth analysis features about particular stocks and markets to help enhance your investment decisions. Find our most recent analyses below:
Zoom Stock Price Opens 11% Lower On Renewed Privacy Concerns
Zoom Stock Price Retreats From the Highs As Company Faces Accusations of Privacy Violations
Buying, selling and trading shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Zoom shares.
- Research the company. You should always examine the fundamentals of a company before owning its stock. What is Zoom? How did the company get its start? How did it grow? Is Zoom’s revenue and profit growth picking up? Is the company innovating? The more you know about Zoom, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of the different ways to invest in Zoom shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Zoom shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Zoom’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is largely the same process, though it is done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Zoom shares through buying and selling shares outright, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long-term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of holding shares in a particular company for the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to profit from short-term fluctuations in stock price value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into ZM shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in ZM stock on this page. If, however, you’re ready to get involved now, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large, these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to access the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place orders for stocks. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to invest using a specific payment method, such as PayPal. Not all brokers accept every payment method, but by using our comparisons, you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
Latest Zoom news
Zoom Video share price forecast after Q1 results
Zoom stock soared 20% after-hours on Q1 results
Zoom Video Communications to focus on M&A in fiscal 2023
Stock trading courses
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Short-term Stock Trading
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >