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Zoom Battles to Retain Pandemic-Era Dominance Amid Fierce Competition
4 Aug
Summary
- Zoom's market share remains dominant at 57%, but competitors like Microsoft Teams are gaining ground
- Zoom's revenue growth has slowed to just 3% year-over-year, underperforming the industry's projected 8% CAGR
- Zoom's market cap nearly matches the estimated size of the entire video conferencing market, raising questions about its growth potential
As of August 4th, 2025, Zoom Video Communications (NASDAQ: ZM) has faced significant challenges in maintaining its pandemic-era dominance in the online meeting platform market. While Zoom remains the leading player, with a 57% market share, the company has seen its popularity wane as people have returned to offline activities.
Moreover, numerous competing platforms have emerged, including Microsoft's Teams, which now claims a 25% market share, and offerings from Alphabet's Google and Cisco Systems. This increased competition has led investors to question how much of a competitive moat Zoom can truly claim.
Despite these headwinds, Zoom has continued to benefit from the legacy of the pandemic, as many workers have never returned to the office, making online meeting technology still essential. However, the company's financial performance has been lackluster, with revenue growth slowing to just under 3% year-over-year in the first quarter of fiscal 2026.
This slow growth rate underperforms the industry's projected compound annual growth rate (CAGR) of 8% through 2033, which would see the global video conferencing market grow from around $12 billion currently to $24 billion over the next eight years. With Zoom's market cap already nearing $23 billion, this raises questions about the company's long-term growth potential.
While Zoom is more than just an online meeting platform, offering phone, chat, and AI capabilities, its competitors also provide similar features, making it difficult for Zoom to differentiate itself and maintain its competitive edge.
