15 hours ago 1

DA Davidson Sees Upside as NICE (NICE) Acquires AI Firm Cognigy

Fri, Aug 15, 2025, 1:05 PM 2 min read

NICE Ltd (NASDAQ:NICE) is one of the most undervalued cybersecurity stocks to buy now. On July 28, DA Davidson initiated coverage on NICE Ltd (NASDAQ:NICE) with a Neutral rating and a price target of $195, implying over a 42% upside from the current price of $143.69. The firm’s initiation came after the Israeli company agreed to acquire Cognigy for $955 million.

DA Davidson Sees Upside as NICE (NICE) Acquires AI Firm Cognigy

A data scientist sitting in front of a monitor to review the performance of AI-driven digital business solutions.

Cognigy is a private company that provides enterprises with a platform that can help them build and manage AI-powered conversational agents, which help improve customer service and support. According to DA Davidson, the acquisition is a strategic step that could help NICE Ltd (NASDAQ:NICE), a global leader in AI-powered customer experience, further its position in the AI space, particularly in customer service and automation.

However, DA Davidson gave a caveat that the price Nice is paying for the acquisition is high based on the company’s current size. The price represents more than 10% of the company’s market cap. While DA Davidson thinks that the move has long-term benefits, it also believes the valuation is difficult to justify in the short term.

NICE Ltd (NASDAQ:NICE) offers a number of cybersecurity solutions, particularly focusing on financial crime. However, the company also provides customer experience management, AI-driven analytics, and workforce engagement.

While we acknowledge the potential of NICE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.