Shares of Zoom Video Communications (NASDAQ: ZM) were climbing today as the stock seemed to benefit from fears over rising coronavirus cases in the U.S. and Europe, and as the company announced a new end-to-end encryption feature, helping to enhance privacy and security.
As of 11:59 a.m. EDT on Monday, the stock was up 3.9% after gaining as much as 5.8% earlier in the session.
Image source: Zoom.
Over the weekend, new U.S. daily cases set a record with 81,417 reported on Oct. 23, according to Worldometer, and the seven-day moving average was nearly 69,000, on its way to setting another record. At the same time in Europe, a number of countries took steps to restrict movement in order to control another outbreak as the Continent's biggest economies are seeing record numbers of new cases. France, for example, imposed a nighttime curfew in Paris and other cities.
Zoom usage skyrocketed during the initial lockdowns in the spring, and investors seem to believe that rising cases will increase or at least sustain high traffic on the videoconferencing app for several more months. Zoom shares rose even as the S&P 500 fell more than 2%, and markets in Europe were down broadly as well.
Separately, the company said this morning that its new end-to-end encryption feature was available globally for free and paid users in meetings of up to 200 people. Privacy and security concerns have at times led users to switch to Zoom competitors, and concerns about "Zoombombing" hounded the company back in the spring. Zoom's chief information security officer Jason Lee said, "This has been a highly requested feature from our customers, and we're excited to make this a reality."
The high-flying tech stock has been one of the biggest winners during the pandemic, with shares up nearly 700%. Revenue soared more than 300% in its most recent quarter, and its performance has wowed the market in almost every way, blowing past estimates. Meanwhile, Zoom has made a number of improvements to its platform, like it just did with encryption, showing potential for new products.
If coronavirus cases continue to spike, Zoom shares could tack on even more gains.
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