Podcast Summary: "Is Zoom Sitting On Billions In Anthropic Gains? Plus, Why The Business Can Thrive During The AI Revolution"

Chit Chat Stocks – February 18, 2026
Guests: Sean Emery (Avery & Co.), Ryan Henderson, Brett Schaefer
Ticker Discussed: ZM (Zoom Video Communications)

Episode Overview

This episode explores the overlooked resurgence and strategic direction of Zoom Video Communications post-pandemic. Special guest Sean Emery, CIO at Avery & Co., analyzes Zoom’s business health, competitive positioning, expansion beyond meetings, and its high-stakes investment in Anthropic, all through the lens of an evolving AI-driven software landscape. The hosts and guest also address investor skepticism, product evolution, the financial moat, and why Zoom is more resilient and promising than commonly perceived.

Key Discussion Points & Insights

1. What Happened to Zoom After the Pandemic?

[02:05]

• Zoom became extraordinarily popular during Covid, skyrocketing in both revenue and market capitalization, but normalized afterward.
• Many investors shunned Zoom due to its post-boom correction, leading it to fall under the radar.
• Despite this, Zoom has continued to grow revenue and maintain margins even after lockdowns ended, a testament to its sound execution.
  • Quote: “Underneath the surface, you actually have a company that is executing pretty well considering what had happened four or five years ago.”
    — Sean Emery [02:05]

2. Zoom's Core Differentiator and Competitive Advantage

[04:35]

• Despite competition from Microsoft and Google (who bundle video products), Zoom offers several unique selling points:
  • Privacy & Reliability: Zoom runs its own data centers, making it attractive to enterprises that may see Big Tech as competitors.
  • Platform Expansion: It now offers Team Chat (Slack alternative), Zoom Phone (cloud PBX), Contact Center, and more.
  • Cost Competitiveness: For larger enterprise plans, Zoom can be cheaper than bundled alternatives.
  • Best-in-class User Experience: Many users, including institutional clients, prefer Zoom’s intuitive interface over the alternatives.
  • Quote: “If you're an enterprise…do you really want to provide [Amazon, Google, or Microsoft] all your communication tools...Zoom has privacy embedded in it from the data center level.”
    — Sean Emery [04:35]

3. Enterprise Expansion & Product Adoption

[11:23]

• New products like Zoom Phone and Contact Center now account for an estimated 16-20% of revenue, helping offset declines in consumer business.
• Both product lines are growing rapidly (Zoom Phone at 10M+ seats), underpinning future growth and adding a protective moat via increased switching costs.
• Enterprise churn is at record lows, and Zoom continues to win major contracts (e.g., with Amazon and Fortune 10 banks).
  • “Without the additional products, this would have been a declining revenue business...So about five years ago they launched Zoom Phone...Today it's at 10 million seats...It's the fastest growing cloud-based phone system out there.”
    — Sean Emery [11:23]

4. AI Integration—A Threat or an Opportunity?

[16:13]

• Direct AI competition is less of a threat for Zoom than for task management apps; communication platforms require fidelity, reliability, and regulatory compliance, which makes them harder to displace.
• Zoom is embedding AI (up to Companion 3.0) for automated summaries, agentic workflow tools, and more—enhancing stickiness and opening monetization opportunities.
• Quote: “I do think video, specifically video phone systems, all of that I think is much more insulated from, you know, call it AI recreation. And if anything AI helps.”
  — Sean Emery [18:18]

5. Why Don’t Enterprises Just Build Their Own Zoom?

[20:50, 21:23]

• Even massive tech companies (Amazon with Chime; Meta’s failed internal suite) have tried and failed to build replacements, instead adopting Zoom.
  • “Amazon tried building Chime...and they're like, you know what? We're shutting this thing down...Meta...ended up closing that down and sending all of their business to Zoom.”
    — Sean Emery [21:23]

6. The Anthropic Investment—Zoom's Hidden Asset

[26:36, 27:34]

• Zoom invested $51 million in Anthropic in 2023; now, with Anthropic’s valuation ballooning (potentially to $350-500B), this stake could be worth up to $3.5B—potentially ~half of Zoom’s cash balance.
  • Strategic rationale was access to cutting-edge AI models for enhancing Zoom’s platform (federated AI approach).
• This stake provides a potent hedge for investors (“protective layer”) if AI platforms swallow value from SaaS competitors.
  • Quote: “If AI eats software...who's best positioned? The ones that are sitting with, you know, stakes in these businesses.”
    — Sean Emery [32:30]

7. Zoom vs. Dropbox/Box—Can It Avoid ‘Perpetual Stagnation’?

[33:54, 36:23]

• Comparison with Dropbox/Box: the key difference is focus on enterprise sales and deep product suite.
• Enterprises are stickier, less price-sensitive, and value security and integration.
  • “Their enterprise business is their business. It's always been their business. Covid kind of changed that dynamic a little bit, but...when you're in the enterprise and you sell to the enterprise, you are insulated more.”
    — Sean Emery [36:23]

8. Impact of Covid—Gift and a Curse

[39:47]

• Covid turbocharged both Zoom’s growth and Microsoft’s response (Teams).
• Downside: massive culture shock, employee stock compensation challenges due to wild stock swings, but also provided cash that padded the balance sheet.
  • “Covid sparked the requirement for Microsoft to get serious about this...A lot of cash flow came in. The worst part...was culture.”
    — Sean Emery [39:47]

9. Pricing Power and Capital Allocation

[42:25, 45:48, 46:12]

• Zoom has demonstrated pricing power: price raises have come with record low churn.
• Conservative with capital: plenty of cash, thoughtful buybacks (historically offsetting stock-based comp; now poised for true share reduction), selective small acquisitions, and low debt.
  • “He [Eric Yuan] has a war chest of capital, you know, $8B and no debt...he's been a very conservative steward of capital.”
    — Sean Emery [45:48]
  • “Stock based comp is now, you know, closer to 15% and declining....The goal is to get it sub, you know, 10, which is fairly normal…”
    — Sean Emery [46:12]

10. Valuation Outlook

[51:40]

• Zoom is a “steady, easy compounder” with high margins (cash flow >40%, GAAP approaching 25%) and low-risk balance sheet.
• Returns will come from continued enterprise expansion, product cross-sell, and potential multiple expansion.
• Anthropic and other strategic investments are “cherry on top.”
  • “You get to numbers that are, you know, closer to double where they are today on...a five year basis. And it's really just revenue growth with same margins...”
    — Sean Emery [53:38]

11. Common Misunderstandings about Zoom

[56:05]

• The prevailing narrative is that Zoom is "just a meetings company" and faces existential threat from bundled competitors.
• Reality: It’s a robust full communications platform with tentacles across organizations, showing minimal evidence of meaningful competitive erosion.
  • “There's very little evidence of that...it's not showing up in margins, which would be the most obvious place this would show up...”
    — Sean Emery [56:05]

Notable Quotes & Memorable Moments

• On Brand Loyalty and Burned Investors:
  “A lot of people got burned...when you get burned, you shun it. ...That's just human nature.”
  — Sean Emery [02:05], [56:05]

• On Enterprise Security:
  “Do you really want to provide [Big Tech competitors] all your communication tools, your sales reps on calls?”
  — Sean Emery [04:35]

• On AI as an Opportunity, Not a Threat:
  “The voice AI opportunity is probably pretty, pretty large...If anything AI helps.”
  — Sean Emery [18:18]

• On Amazon/Meta’s Failed Attempts:
  “They own the compute...more engineers than you can imagine...and they’re like, you know what? We’re shutting this thing down.”
  — Sean Emery [21:23]

• On Capital Allocation & Conservatism:
  “His saying is, ‘You raise capital not when you need it, but when people are willing to give it to you...’ [Eric Yuan] has been a good steward of capital.”
  — Sean Emery [46:12]

• On the Anthropic Investment:
  “If AI eats software...who’s best positioned? The ones that are sitting with stakes in these businesses.”
  — Sean Emery [32:30]

Timestamps for Important Segments

• 02:05 – What happened to Zoom after the pandemic?
• 04:35 – Why customers choose Zoom over Microsoft/Google
• 11:23 – Adoption of Zoom Phone, Contact Center, AI companion, impact on financials
• 16:13 – Will AI be a threat to Zoom’s business model?
• 21:23 – Amazon and Meta’s failed attempts to replace Zoom internally
• 26:36 – The Anthropic investment: size, rationale, implications
• 33:54 – Zoom vs Dropbox/Box: Will Zoom stagnate?
• 39:47 – Was Covid good or bad for Zoom in the long run?
• 42:25 – Does Zoom have pricing power?
• 45:48 – Buybacks, capital allocation, stock-based compensation
• 51:40 – Valuation, growth, and margin outlook
• 56:05 – What do most people misunderstand about Zoom?

Conclusion: Why Zoom Is an Underappreciated Compounder

Zoom has evolved from a “pandemic darling” to an enterprise communications platform with significant cash, extended product suite, and differentiated AI integration—demonstrating resilience, pricing power, and innovation. Its substantial Anthropic stake adds asymmetric optionality. The most common misreading is seeing Zoom as just a meetings company, failing to perceive its entrenched position in business workflows.

“Meetings was the way in, and then people that are using it are using it across multiple services...It's become kind of like a mini communications hub for external and internal.”
— Sean Emery [56:05]

Listeners are encouraged to revisit their assumptions about Zoom, especially as the AI and enterprise SaaS landscape rapidly evolves.