Nice: A Software Bargain, By Gum!

by

Now, I’ve seen a good many things turn up and turn down in this world, and Wall Street’s no exception. Lately, there’s been a right fuss made over this “artificial intelligence” – folks acting like it’s a menace to honest software companies. But old Man Nice – that’s the company, mind you, not a fella I know – he tells his investors it’s expanding his opportunities. And, by my reckoning, he’s likely right. Still, a good many folks remain dubious whether this AI business will actually turn around the fortunes of Nice. Seems they expect a miracle, and miracles are in short supply these days.

But Nice, she’s positioned herself rather smartly, and her stock looks like a genuine bargain right now. A rare thing, that.

The AI-Powered Contact Center – A Modern Marvel

Nice’s main trick, you see, is this here “CXone Mpower” – a cloud-based contraption for handling customer service. It catches every message comin’ in – phone calls, web chats, scribbled notes carried by pigeons, you name it – and routes ’em to the agents. Keeps things movin’, minimizes the waitin’ time. A clever bit of kit, if I do say so myself.

Now, customer service is ripe for this “generative AI” business. Imagine a machine that can read up on a company’s history, know its customers’ quirks, and spit out answers like a seasoned pro. It could handle a heap of cases, leaving the agents to deal with the truly troublesome ones. Some folks see this as a threat to Nice. I see it as a grand opportunity, a chance to make things work smoother, and maybe, just maybe, keep a few more folks from pullin’ their hair out.

And Nice, bless her heart, has capitalized on it. Their AI-related revenue is climbin’ at a rate that’d make a mountain goat dizzy – up 66% last quarter, no less! And they’re not content to rest on their laurels. They’re addin’ this “Cognigy” fellow in 2026 – a developer of conversational AI agents. They’re also plowing about $95 million into AI this year, more computing power, and a bigger budget for tinkerers and dreamers. A substantial investment, and a sign they’re serious about this newfangled technology.

Loading widget...

This momentum ought to give Nice a good push in cloud revenue growth – arguably their most important piece of the puzzle. It’s been slowin’ down these past few years, but management is predictin’ 14.5% to 15% growth for 2026, a welcome change. Their backlog is climbin’ too – up 25% year over year. Long term, these AI investments should keep that cloud growin’. They’re predictin’ 17% to 19% growth by 2028. A bold claim, but not one I’d dismiss out of hand.

And while they’re busy innovatin’, they’re not forgettin’ about the shareholders. They’re returnin’ about half their free cash flow through share repurchases – a new $600 million authorization, no less. That’s a considerable portion of their $7 billion market cap. With the stock tradin’ at close to 10 times earnings estimates, it looks like a sensible use of capital – for the company and for those lookin’ to invest. A rare win-win situation, and one I reckon is worth considerin’. It’s a good, solid company, and in this world, that’s become a rare and precious thing indeed.

Read More

2026-03-03 20:24