An early share price advance in after-hours trading for Zoom Video Communications (ZM:NASDAQ) off the back of its latest earnings update (22 May) evaporated fast.

The video conferencing platform raised its annual revenue forecast to between $4.47 billion and $4.49 billion, representing year-on-year growth of 2%. Previously it had forecast $4.44 billion to $4.46 billion.

First-quarter revenue was ahead of forecasts but also represented the slowest quarterly growth on record of 3%. Its enterprise business, which encompasses larger customers, saw quarterly growth of 13% but the company’s guidance implied a slowdown in the remainder of the year. These factors saw the stock give back all its initial gains.

During the pandemic Zoom shares surged to highs above $550 as the platform entered the public consciousness and demand soared but it now trades at a little over $71.

Growth has slowed significantly and the competitive threat from rivals with deeper pockets, most notably Microsoft (MSFT:NASDAQ), has put Zoom on the back foot.

As Microsoft introduces AI functions into its Teams video conferencing system it could further increase its grip on a market which could have a winner-takes-all element to it.

After all, if Microsoft becomes the platform of choice for businesses and individuals then increasingly it may become the only service people feel they need to subscribe to, thereby squeezing Zoom out of the picture.

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