The rapid adoption of artificial intelligence (AI) has given tech stocks a big boost over the past two years, which is evident from the 77% gains seen by Nasdaq-100 Technology Sector index during this period. But not all tech stocks have benefited from AI-driven growth in the tech sector.

Zoom video communications (NASDAQ: ZM) and Twilio (NYSE: TWLO) there are two such names. While Zoom’s stock has fallen 8% over the past two years, Twilio has gained a paltry 13%. Both companies saw a significant slowdown in their businesses following the pandemic, but now, both are looking to resume growth with the help of AI.

Let’s take a closer look at the AI ​​prospects of both Zoom and Twilio and see which one might be better AI stock to buy right now.

The case for Zoom video communications

Zoom is known for its communication platform that allows users to connect with each other using various modes such as video, audio, chat and voice. The company’s video conferencing platform gained immense traction during the pandemic, when working from home and online education gained tremendous popularity.

However, as the following chart shows, the company’s recent growth has not been as fast as during the pandemic.

ZM revenue (annually) given by YCharts

For example, the company’s revenue in the second quarter of fiscal 2025 (which ended July 31) rose just 2.4% year-over-year to $1.16 billion. Non-GAAP net income rose just 3.7% year-over-year to $1.39 per share. Consensus estimates aren’t too bullish on Zoom’s growth either. Its top line is expected to improve just 2.5% in the current fiscal year to $4.64 billion.

Even the long-term outlook doesn’t look all that bright, as analysts expect the company’s bottom line to grow at a compound annual growth rate of just 1.5%. However, it is worth noting that integrating AI tools into the Zoom platform could lead to improved customer spend as well as increased customer base.

The company introduced an AI assistant known as Zoom AI Companion last September and has been making improvements to this platform ever since. From allowing users to compose replies to chats to returning to meetings that are already in progress to generating meeting summaries, Zoom has introduced a number of AI-powered features to improve the usefulness of its offerings.

Zoom recently introduced version 2.0 of its AI Companion, which will help users summarize and access information from multiple workplace collaboration apps, such as Microsoft Outlook, Google Calendar, Gmail and more. The updated AI assistant will also help users decide their next steps after meetings, along with many other features such as generating new content.

Zoom’s AI features are gaining traction with customers, as management pointed out in August earnings conference call. This probably explains why customers are spending more money on its platform now. The number of customers who contributed more than $100,000 in trailing 12-month revenue in the previous quarter increased 7% year-over-year.

As a result, the company’s remaining performance obligations (RPOs), which refer to the total value of a company’s future contracts that have not yet been fulfilled, rose 8% year-on-year to 3.78 billion dollars. The faster RPO growth compared to Zoom’s revenue growth is a sign that the growth rate is likely to improve in the future.

Not surprisingly, Zoom raised its full-year revenue guidance when it released its earnings in August. Analysts have also raised their earnings growth expectations for Zoom recently.

ZM EPS estimates for the current fiscal year given by YCharts

With the global market for workplace collaboration apps expected to double to $71.6 billion by 2027, according to market research firm IDC, Zoom has a solid opportunity for incremental growth that could – take advantage of it with the help of AI.

The case for Twilio

Twilio has made a name for itself by helping customers move their contact centers to the cloud and the enterprise enjoyed incredible growth after going public in June 2016. However, Twilio saw a big problem slowing its growth latelyalthough there’s no denying that things are starting to look good.

The company’s third-quarter 2024 revenue rose 10% year over year to $1.13 billion. Twilio estimated that its organic revenue growth would come in between 7% and 8% for the full year. On the other hand, analysts expect total revenue to rise just 6% to $4.42 billion. However, the forecast for the next two years indicates a slight acceleration of growth.

TWLO Revenue Estimates for the Current Fiscal Year given by YCharts

Twilio AI offerings help its customers reduce customer acquisition costs and improve customer lifetime value. Given that Twilio already has a huge active customer base of 320,000 customers, it is in a good position to sell its new AI offerings and earn a larger share of their wallets.

The company’s AI-focused offerings, such as CustomerAI, help its clients leverage the customer data platform to gain better insight into customer behavior, leading to improved engagement and sales. Twilio’s net dollar growth rate of 105% in the third quarter indicates that its existing customer base is spending more money on its offerings.

This metric compares the revenue generated by Twilio customers at the end of a given quarter to the revenue generated by the same customer base in the year-ago period. So a reading above 100% means those customers have increased their use of the Twilio platform or adopted more of its solutions.

More importantly, the company is moving into new AI-centric niches it could also help it tap into multibillion-dollar markets like conversational AI assistants. All in all, it won’t be surprising to see Twilio grow in the future thanks to its AI-focused efforts and solid customer base.

verdict

So far, it’s clear that there aren’t many separations between Twilio and Zoom. Both companies are growing at a slow pace right now, although Twilio is growing at a slightly faster pace. Coming to valuation, while Zoom trades at 5x sales, Twilio presents a the price-to-sales ratio from 3.4. Both companies’ forward earnings multiples are also on the cheap side, given that Nasdaq-100 the index has a forward price-to-earnings ratio of 30.

ZM PE report (before) given by YCharts

The bottom line is that both Zoom and Twilio are cheap stocks to buy right now, and their growth could accelerate in the future thanks to AI. So investors could consider buying either of these two stocks, although those looking for better value and slightly faster growth may be tempted to buy Twilio over Zoom.

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Rough Chauhan has no position in any of the shares mentioned. The Motley Fool has positions in and recommends Microsoft, Twilio and Zoom Video Communications. The Motley Fool recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.