How to Buy Zoom Stock

Zoom's stock has enjoyed a healthy rise following its IPO in April, and the company is profitable. If you're interested in investing in Zoom, here’s what you need to know about buying Zoom stock.

Dayana YochimJune 19, 2020
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Everyday investors can now jump on the line with Zoom Video Communications, which debuted on the Nasdaq stock exchange in April 2019 under the ticker symbol ZM.

Zoom's cloud-based service allows people in different locations with different devices to connect face-to-face and share content via video, voice and chat. In 2019, Zoom facilitated more than 5 billion monthly meeting minutes — and that number may grow exponentially now that working from home is the norm in 2020.

So Zoom is popular. But does its stock belong in your portfolio? Read on to find out how to evaluate and buy Zoom stock.

1. Research Zoom and its stock

Zoom makes money by selling its platform subscriptions to everyone from single users to companies with hundreds of thousands of employees. Unlike that other recent IPO — Uber — Zoom went into its IPO as a profitable company.

Nerd tip: Zoom's stock symbol is ZM. The company's IPO was in April 2019, at $36 a share.

In the latest fiscal year it brought in more than $7.5 million in profits, thanks in part to marquee companies like Microsoft, Google, Salesforce, Altlassian and Dropbox integrating Zoom’s technology into their platforms. (Full disclosure: NerdWallet uses Zoom. Pro tip: Don’t neglect to hit “mute” when your dog starts barking at the mailman.)

But profitability is just one of many factors investors should consider before buying a stock. Spend some face time with Zoom’s S-1 filing with the Securities and Exchange Commission. It’s a treasure trove of information about the company’s operations, financials, customers, case studies, leadership team, challenges and growth opportunities. In other words, all the things that can help investors determine if Zoom is a worthy addition to their portfolio.

» Want more detail? Learn how to research stocks

2. Open a brokerage account

To buy Zoom stock, you’re going to need a brokerage account. (New to this? See how to open a brokerage account.) In short, you’ll want to look for a broker that has a low account minimum, reasonable commissions (which you’ll pay when you buy shares of Zoom) and a user-friendly platform. Some of our picks for best brokers for beginners are highlighted below:

3. Choose your order type

You’re likely going to choose between a market order (“buy this stock right now at the prevailing market price”) or a limit order (“buy this stock only if it’s available at the price I’ve specified”). For more details, see this piece on how to buy stocks, which walks you through the process of placing an order.

4. Place your Zoom order

To begin: Zoom trades on the Nasdaq under the ticker symbol ZM. This is not to be confused with ZOOM Technologies (ticker: ZOOM), the delisted stock of a mostly shuttered Beijing-based wireless tech distributor that enjoyed a brief share price spike when the U.S.-based Zoom announced its intention to go public and again on IPO day. Be sure to double-check that ticker symbol unless you wish to own part of an unrelated and struggling Chinese telecommunications firm.

Also remember that you need not over-indulge in Zoom with your first purchase. Buying a large amount of a single stock all at once can be risky. Spreading your purchase out over time can help reduce that risk.

Lastly, note that if you’re opening a new brokerage account to buy Zoom, it may take a few days for the money you deposit in your account to be available to invest. But that’s OK. If Zoom is a company worth owning for the long haul, having to wait a day or two to buy it won’t make much difference in the end.

» View our list: The best-performing stocks

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