Buying the dip can feel like a savvy move, but there’s a fine line between a bargain and a “falling knife.” The trick is knowing which is which.
When a company leads its industry, is riding powerful megatrends, and trades at a rare discount, buying the dip might not just be smart, it might be a steal. That’s exactly the situation investors find themselves in with Nice Ltd. (NASDAQ: NICE), a global SaaS leader that’s becoming an AI juggernaut.
The stock is down massively from its highs, yet the business fundamentals have never looked more compelling.
Key Points
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Nice dominates customer engagement, financial compliance, and public safety, serving 85+ Fortune 100 companies in 150+ countries.
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AI powers nearly all major contracts, with AI-related sales up 39% year-over-year, far outpacing overall cloud growth.
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Trading at just 23x earnings, Nice is buying back stock at record pace, signaling strong confidence and a potential bargain for investors.
A Giant in 3 Essential Industries
Nice is a steady operator, serving over 85 of the Fortune 100, with deep roots in enterprise software. The company is a cornerstone in three sectors that are all riding long-term tailwinds.
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Customer Experience Is 75% of revenue: Via the CXone platform, Nice helps companies automate call centers and improve customer engagement with cutting-edge AI tools.
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Financial Crime & Compliance (15%): Nice’s machine learning tools are being deployed across top U.S. and European banks to monitor transactions and flag suspicious activity in real time.
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Public Safety & Justice (~10%): Nice helps police departments and emergency responders manage digital evidence and optimize operations. It’s a duopoly here, sharing the stage with Axon like the Coca-Cola and Pepsi of public safety tech.
And it’s not just about industry reach. Nice is present in over 150 countries, and its services touch nearly every corner of enterprise infrastructure. For an $11 billion company, that’s an impressive global footprint.
AI Is a Core Strategy
The big question for investors today isn’t whether Nice is embracing AI but how deeply it’s woven into the company’s DNA. And the answer? Very deeply.
By early 2025, every $1 million-plus contract in its customer experience division included AI functionality. That’s up from 97% just a year earlier. And AI-related sales are clearly pulling ahead, while total cloud revenue grew 12% year over year in Q1, AI and self-service sales jumped 39%.
That kind of growth gap tells a powerful story: Nice isn’t being disrupted by AI but is helping lead the charge.
Better yet, net revenue retention rate (well above 110%) in the cloud business shows customers aren’t just staying but are spending more, likely driven by newer, more powerful AI tools.
Price Tag That Doesn’t Match the Potential
Despite these bullish signs, the stock tumbled after Q1 earnings due to cautious guidance. That overreaction could be a gift for long-term investors.
Nice is now trading at just 23x earnings and cheap relative to the S&P 500, and management knows it. They are aggressively buying back shares, deploying its $1 billion cash pile to scoop up stock at what it clearly sees as bargain prices. In fact, it’s repurchasing shares at the fastest rate in its history, hardly a sign of a business in decline.
The Bottom Line
Nice may not be a household name in tech circles, but it’s a mission-critical partner to some of the world’s biggest organizations. With dominant status in customer engagement, financial compliance, and public safety, and AI fueling each of those divisions, it’s hard to find a better-positioned software company that’s this overlooked.