Shares of leading enterprise software provider Nice (NICE 1.63%) were up 11% as of 11 a.m. ET on Thursday following the company's fourth-quarter earnings release. Nice beat Wall Street's estimates on both the top and bottom lines, growing sales and adjusted earnings per share by 9% and 7%. While management's guidance for 8% sales growth and $11 in EPS for 2026 fell slightly short of analysts' expectations, the stock nonetheless popped thanks to a critical metric that stole the show.
NASDAQ: NICE
Key Data Points
AI disruption, or an AI tailwind?
With its stock down 15% in 2026 before today's move, Nice had sold off alongside an seemingly endless list of software stocks, as the market weighed whether they could survive AI's rise to prominence. However, CEO Scott Russell announced, "AI ARR increased 66% year over year to $328 million, and AI was included in 100% of our new seven-figure CXone deals for the full year 2025, underscoring strong enterprise demand for our AI-native platform." These strong AI-powered results seemed to have temporarily quelled the market's fears today.
Image source: Getty Images.
Already the highest-ranked leader on Gartner's Magic Quadrant for Contact Center as a Service, Nice acquired Cognigy -- a conversational and agenetic AI leader -- for roughly $1 billion in 2025. This move beefed up the company's AI capabilities, and Nice Cognigy was recently ranked the only Customer's Choice selection for conversational AI platforms in Gartner's December 2025 ranking. Today's results show that this acquisition -- and Nice's AI investments in general -- are paying off.
Counting 85 of the Fortune 100 as customers, Nice's leadership across its niches and its burgeoning AI sales are available at a discounted valuation, with the stock trading at just 10 times free cash flow. Home to roughly $1.1 billion in net cash, generating $700 million in FCF last year, and armed with a $1 billion share repurchase authorization, Nice has been, and probably will continue, buying back shares rapidly at this discounted valuation. I'll be watching Nice closely as it pushes back on the market's consensus that AI will disrupt most software stocks.
