We recently published a list of the 8 best long-term tech stocks to invest in now. In this article, we’ll take a look at how NICE Ltd. (NASDAQ:NICE) stacks up against other tech stocks that are great long-term investments.
After a dire macroeconomic situation in 2022, the technology sector came to the rescue of the market in 2023. Investments in advanced technologies such as generative AI continue to show great potential for future business growth.
According to CNBC’s Q3 CFO Council Survey, 48% of CFOs said tech industry growth will outpace all other sectors in the next six months. Additionally, Leian Mitrione, investment management partner at the Curran Family Office, emphasized in an interview with CNBC on September 23 that the technology sector is a big beneficiary of the recent Fed rate cuts. Lower interest rates are good for technology companies, which often thrive in this environment.
The ongoing AI theme is also a key driver of the strong performance of technology companies. He further notes that while mega-cap tech stocks have traditionally been seen as a safe haven during times of economic uncertainty, the changing interest rate environment is broadening the focus to smaller, economically sensitive sectors. He said it was possible. Nevertheless, the strong momentum for AI-powered technologies is likely to continue for some time.
Global technology spending in 2024 is optimistic
High interest rates, economic concerns, and geopolitical issues slowed global technology spending in 2023, according to Deloitte’s 2024 Technology Outlook. However, there is growing optimism in 2024, with global IT spending growth expected to be between 5.7% and 8%. Growth areas include investments in software, IT services, and AI, with AI spending potentially reaching $200 billion by 2025. Cloud computing and cybersecurity are also expected to be in strong demand.
The report says that although Gen AI is gaining momentum, it is expected to grow slowly in 2024 and grow even more in 2025 as it is integrated into software and business processes to improve productivity and efficiency. states that it has been done. Demand for AI hardware is expected to exceed $50 billion next year, but businesses continue to explore AI monetization strategies.
Improve energy efficiency with AI
Furthermore, the growing influence of large technology companies and increased reliance on AI are significantly increasing energy demand. We discussed this in our article on 13 Big Tech Stocks to Buy Now. Below is an excerpt from the article.
“With the rise of big tech companies and the growing use of AI, a notable recent trend that people have started to notice is an increase in the demand for electricity. The owner recently went so far as to purchase a nuclear-powered data center for $650 million.
The main driver of this increased demand is the need for AI development. Many energy-conscious investors may see this new trend as a red flag for big tech companies. However, Jensen Huang points out that AI requires a lot of energy to train, but once developed and trained, it can also help save energy. In particular, he said that this development will make AI so advanced that it will ultimately provide solutions that will change the way energy is used and make businesses infinitely more energy efficient. ”
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Concerns about the power needed to power AI are justified, but industry pioneers like Nvidia CEO Jensen Huang say the technology itself can help solve that problem.
our methodology
In this article, we use the Finviz Stock Screener to identify 27 tech stocks with market caps above $10 billion, analyst ratings of Buy or Buy-equivalent, and average price targets for upside of more than 20%. I have identified it. As of September 26, we narrowed the list down to the eight stocks with the greatest increase in average analyst price target. Tech stocks that perform well over the long term are listed in descending order of increase in average analyst price target.
We also mentioned hedge fund sentiment for each stock, pulled from the Insider Monkey database of over 900 elite hedge funds.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Is NICE Ltd. (NASDAQ:NICE) the best long-term tech stock to invest in now?
Is NICE Ltd. (NASDAQ:NICE) the best long-term tech stock to invest in now?
NICE Ltd. (NASDAQ:NICE)
Analyst average price target upside: 56.83%
Number of hedge fund holders: 29 people
NICE Ltd. (NASDAQ:NICE) is a provider of cloud platforms for AI-driven digital business solutions. We offer a wide range of digital business tools for a variety of sectors, including customer engagement, financial crime prevention, and public safety. It ranks at the top of our list of the best long-term tech stocks to invest in right now.
The company’s products, particularly NICE CXone and NICE Actimize, stand out for their ability to improve customer interactions and streamline operations. The company helps organizations around the world improve both customer experience and operational efficiency by integrating advanced analytics and artificial intelligence into its platform.
With more than 25,000 customers in more than 150 countries, including a significant number of Fortune 100 companies, the company clearly has established a strong presence in the market. Additionally, NICE (NASDAQ:NICE) has been rated a Buy by 17 analysts. As of September 26, the average price target of $265.00 represents an upside of 56.83% from the stock’s current price.
The strong demand for the company’s cloud solutions is impressive. In the second quarter, the company’s cloud revenue soared. This indicates successful entry into new markets and expansion of customer base.
NICE’s (NASDAQ:NICE) CXone adoption is gaining momentum primarily because it offers a comprehensive solution that effectively integrates AI capabilities. Many organizations have recognized the need to embrace AI to remain competitive, and NICE’s platform has proven to be an essential tool in this transition.
This is evidenced by an increase in large deals, including important contracts with major global companies. During the second quarter, the company announced a seven-figure deal with one of the largest IT companies to replace their existing systems with CXone. This demonstrates the platform’s superior capabilities in functional AI.
During the quarter, a well-known global hotel chain selected NICE’s solutions to support its digital transformation. This demonstrates the tangible benefits of using CXone Autopilot to accurately interpret consumer intent.
According to Insider Monkey’s database, 29 hedge funds held shares in NICE (NASDAQ:NICE) during the second quarter, with positions worth $742,727,000. As of June 30, RGM Capital held 1,051,000 shares of the company’s stock (valued at $180.76 million), making it the company’s largest shareholder.
Parnassus Investments said the following about NICE Ltd. (NASDAQ:NICE) in its Q2 2024 investor letter:
“NICE Ltd. (NASDAQ:NICE) reported first-quarter profits that beat consensus estimates. However, the news that the company’s CEO plans to retire at the end of the year and the The stock price fell due to concerns that the company could be replaced by AI capabilities.
Overall, NICE ranks #1 on our list of best tech stocks for long-term investing. While we see the potential of NICE as an investment, we believe AI stocks offer higher returns and are more likely to achieve them. shorter period. If you’re looking for AI stocks with better prospects than NICE, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: $30 trillion opportunity: Morgan Stanley’s 15 best humanoid robot stocks to buy and Jim Cramer says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
