NICE stock has dropped 26%, facing competition, but showing growth potential in cloud and AI

From Nasdaq: 2025-03-05 11:36:00

Nice (NICE) shares have underperformed the Zacks Internet-Software industry and Computer & Technology sector, losing 25.6% in the past year. Stiff competition from industry players like CRM and EGHT is a challenge, but NICE’s growing client base and demand for its solutions are positives. In Q4 2024, revenues rose 16% year over year.

NICE’s cloud growth, driven by its CXone platform, has been impressive. Cloud revenues surged 24% year over year in Q4 2024 to $534 million, representing a record 74% of total revenues. The company’s AI-driven approach, with the CXone Mpower platform, is attracting clients like Sony, TD Bank, and Lowe’s.

NICE’s partnerships with AT&T and Microsoft, especially the integration of NTR-X Compliance Recording into the Microsoft Azure Marketplace, are key growth drivers. The company expects a 12% year-over-year growth in cloud revenue in 2025, with strong Q1 guidance and estimates for the year.

For Q1 2025, NICE’s earnings growth is estimated at 10.08% year over year, with revenues expected to increase by 6.08% from the prior year. The company has a history of beating earnings estimates. Investors may find NICE stock attractive for its growth potential in the cloud and AI domain.

NICE faces stiff competition in the market, particularly from Five9’s AI-driven solutions on Google Cloud Marketplace. Five9’s global availability of AI-driven CX solutions poses a direct challenge to NICE, impacting its top-line growth. NICE shares are trading cheap with a Value Score of B and a lower P/S compared to the industry.

Zacks Investment Research recommends a top semiconductor stock poised for growth in AI, ML, and IoT markets. With global semiconductor manufacturing projected to reach $803 billion by 2028, this stock offers significant growth potential. Investors can access the full report for free to explore this opportunity.



Read more at Nasdaq: NICE Plunges 26% in One Year: Buying Opportunity or Warning Sign?