How to Buy Zoom Stock: Invest in the Popular Video Conferencing Platform
Video conferencing has gained massive importance in the times of social distancing and many signs point toward remote work being a big part of the future workplace.
That means:
Video conferencing is a technology that you might find worthy of your investment.
One of the biggest names is Zoom, a popular video-conferencing platform that is used by consumers and businesses.
If you want to start investing in shares of Zoom, this article will discuss how to buy Zoom stock.
Company Overview
Zoom is a relatively new company, having been founded in 2011.
Currently, the company is headquartered in San Jose California, and employs a bit more than 2,500 people.
Zoom’s primary product is its videoconferencing software, which lets people communicate with text, voice, and video over the internet.
Its strategy is to focus on reducing costs, especially infrastructure costs, by using peer-to-peer networking and maximizing employee efficiency.
Zoom operates on a freemium model, which means that its basic service is free to use while premium features require payment.
Anyone can make basic video calls for free, but advanced features like conference rooms, large group meetings, or webinars all have their own subscription costs.
Much of Zoom’s revenue comes from large organizations and businesses that purchase subscriptions for its services. In 2019, the company earned $622 million in revenue and turned a $21 million profit.
Competitors
Zoom has a huge number of competitors in the teleconferencing market and tries to set itself apart by making its application the easiest to use.
Some of Zoom’s competitors include:
- Microsoft
- Cisco
- Webex
- BlueJeans
- TeamViewer
- GoToMeeting
Research and Analysis
Research and analysis are essential to understand a company, its market, and its competitors.
Without knowing the company’s situation, you can’t know whether its shares are a good investment.
However, even with in-depth research, you can’t guarantee that an investment will perform well.
It’s all about maximizing your chances of making the right decision and laving you comfortable with the investment choices you’ve made.
Everyone does investment research in different ways.
Advanced investors might use technical analysis, looking at stock charts and mathematical indicators that can help them set target buy and sell prices.
Other investors might look at the financial reports of a dozen companies in the industry. Others will turn to the news, reading every article they can find that mentions the company they’re considering.
When researching a company, most investors want to look at where the company is right now.
- Is it performing well or poorly?
- Do its financial statements show a company in a stable position or one that is on the verge of bankruptcy?
- Is the product that the company provides in demand right now, or is it losing popularity and becoming out of date?
Another thing to consider is the management team. Even a fantastic company can fail with poor management and a failing company can thrive with strong leadership.
Many investors look to the management team when deciding whether to invest in a business.
The growth (or fall) in a stock’s price typically occurs because of its future performance, so most investors also look toward the future before buying shares.
Is the company’s business model sustainable?
Are there any major risks to the company’s future, such as larger competitors taking over the market or regulation making the product illegal or less valuable?
Most investors look for businesses with the potential to grow over the long term.
How to Buy Zoom Shares
If you want to buy shares in Zoom or any publicly traded company, the process is pretty simple.
You'll need a brokerage account
The first thing that you have to do is open a brokerage account.
There are dozens of brokerage companies out there and you can even open an account and place trades easily from your smartphone.
Once you’ve opened an account, you have to link your bank to the brokerage and transfer funds. You’ll use the money in your brokerage to pay for the shares that you buy.
Once you fund your account, you’re ready to place a trade.
Place a trade
When buying shares in individual companies, it’s important to make sure you’re buying shares in the correct business.
Some companies have very similar names or ticker symbols to other firms.
Zoom’s ticker symbol is (ZM), so make sure you’re buying the right shares.
You can place a market buy order, which will immediately buy shares at the best available price or you can place a buy limit order.
A buy limit order specifies the highest price you’re willing to pay.
Your brokerage will try to fulfill the order at the best available price but won’t put the order through if no shares are available at or below your maximum price.
Buy mutual funds or ETFs
If you don’t want to buy shares in individual businesses, but still want to invest in Zoom, you can consider mutual funds or ETFs that hold Zoom stock as part of their portfolio.
Funds make it easy to diversify your investment among many companies, which can reduce your risk.
For Zoom, total market funds, which own shares in almost every business on the market, or tech-focused funds are a good bet.
Consult an Advisor
Before you make any major financial decision, such as making adjustments to your portfolio or buying shares in a business, it’s a good idea to consult a financial advisor.
Advisors can help you manage your portfolio’s risk and make sure that you’re setting yourself up for success in the long-term.
Some investors work with robo-advisors, programs that automatically manage their investments.
Robo-advisors adjust your portfolio automatically based on your risk tolerance and investing goals, making them popular with people who prefer hands-off investing.
However you prefer to get help with your money, an advisor can make sure that you’re managing your money effectively.
