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Morgan Stanley (NYSE:MS) has reiterated its Overweight rating and $202.00 price target on NICE Systems Ltd (NASDAQ:NICE), a company that InvestingPro analysis indicates is currently undervalued. With a market cap of $10.8 billion and analyst targets ranging up to $300, the firm cited accelerating AI adoption as a key factor in its assessment of the customer experience software provider.
The research note highlighted that NICE achieved $208 million in annual recurring revenue (ARR) from AI in the first quarter of 2025. Morgan Stanley observed inflection points in Digital Interactions and CXone Mpower AI traffic, while noting that voice interactions have maintained stability. The company’s strong financial health score of "GREAT" on InvestingPro and revenue growth of 12.6% support this positive momentum.
NICE’s recently announced Agentic capability was identified as an expansion of monetization potential to middle and back-office workflows. Morgan Stanley indicated that the company sees stronger monetization potential in these areas compared to conversational AI applications.
The firm expressed encouragement that NICE reiterated its fiscal year 2025 outlook, though medium-term financial targets were not discussed. Updates on these targets are expected at the company’s Capital Markets Day in October 2025.
Morgan Stanley maintained that cloud acceleration remains the key variable for NICE to achieve the firm’s price target. The analysts expressed continued confidence in the company’s focus and pace of execution in the AI and cloud spaces.
In other recent news, NICE Ltd. reported significant developments that are capturing investor attention. The company reiterated its 2025 guidance and announced that its AI and self-service annual recurring revenue reached $208 million in the first quarter of 2025, marking a 39% growth from the previous year. NICE also expanded its partnership with Amazon (NASDAQ:AMZN) Web Services (AWS) to enhance AI-powered customer service tools, integrating AWS’s generative AI services across its CXone Mpower platform. This collaboration focuses on simplifying AI agent creation, driving enterprise automation, and empowering teams with AI augmentation.
Additionally, NICE launched its CXone Mpower Agents, a new AI solution designed to automate customer service workflows across various business operations. The technology allows businesses to quickly deploy AI agents that can operate throughout the customer service ecosystem. Strategic partnerships were further strengthened with ServiceNow (NYSE:NOW) and AWS, aiming to enhance AI-powered customer service solutions and accelerate end-to-end automation.
Analyst activity also highlighted NICE, with JMP Securities maintaining a Market Outperform rating, citing positive feedback from customers and partners on NICE’s competitive positioning. Meanwhile, Cantor Fitzgerald reiterated its Neutral rating with a $161 price target, acknowledging NICE’s consistent performance and strategic AI advancements. Despite these developments, Cantor Fitzgerald noted some challenges such as flat gross margins and integration impacts from LiveVox.
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