NICE Drops 37% in a Year: How Should You Approach the Stock in 2026?

NICE NICE shares have dropped 37.2% in a year, underperforming the Zacks Internet Software industry’s return of 6.1% and the broader Zacks Computer and Technology sector’s appreciation of 21.5%. The share price movement has been suffering from a challenging macroeconomic environment and tough competition. The Cognigy acquisition is now expected to hurt operating margin, which NICE expects to contract slightly in 2025. So, how should investors approach the stock in 2026?

NICE’s AI-First Strategy to Boost 2026 Prospect

NICE’s AI capabilities were included in every new CX deal in the third quarter of 2025. Cloud backlog increased 15% year over year, while AI and self-service offerings are driving cloud revenues, which grew 13% year over year to $563 million. Cloud's annual recurring revenues accelerated 49% year over year, driven by strong demand for its solutions as well as contributions from NICE Cognigy. Next-generation CX AI now represents 12% of NICE’s overall cloud revenues.

Strong demand for NICE’s AI capabilities drove strong bookings for Autopilot and Copilot, deals of which more than tripled in the third quarter of 2025. The company’s CX AI platform, CXone, is blending human and AI agents effectively to deliver automated workflows to customers. NICE’s prospects are expected to benefit from strong demand for Cognigy conversational and agentic AI solutions. The combination of CXone and NICE Cognigy bodes well for the company’s 2026 prospects.

The addition of Cognigy boosts NICE’s rapidly growing CX AI. Cloud NRR for the trailing 12 months was 109%, reflecting continued strength in customer loyalty and expansion activity. This, along with strong international revenue growth expectations, bodes well for NICE’s prospects. Cognigy's strong presence and brand recognition in EMEA, coupled with its growing presence. In the Americas, it bodes well for NICE’s international business.

Nice Price and Consensus

Nice price-consensus-chart | Nice Quote

NICE Updates 2025 Guidance

NICE expects fiscal 2025 non-GAAP revenues between $2.932 billion and $2.946 billion, indicating 7% year-over-year growth at the midpoint. The company now expects year-over-year cloud revenue growth to be in the 12% to 13% range. The Zacks Consensus Estimate for 2025 revenues is currently pegged at $2.94 million, suggesting 7.4% growth year over year.

Adjusted earnings for 2025 are expected to be between $12.18 per share and $12.32 per share, indicating 10% year over growth at the midpoint. The Zacks Consensus Estimate is currently pegged at $12.28 per share, indicating 10.4% growth year over year. The figure was unchanged over the past 30 days.

Zacks Rank & Stocks to Consider

NICE currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader sector are Advanced Energy Industries AEIS, Digital Turbine APPS and Kimball Electronics KE, each of which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Advanced Energy Industries, Digital Turbine and Kimball Electronics are currently pegged at 33.4%, 42.4% and 20%, respectively. Shares of Advanced Energy Industries, Digital Turbine and Kimball Electronics have appreciated 90.4%, 181.3% and 52.5%, respectively, over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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