NICE Stock Climbs Over 40% as Advanced Talks Emerge to Sell Actimize Unit
NICE shares have surged 40% since June amid reports of a potential $2 billion sale of its Actimize financial crime unit to Brookfield. Analysts view the divestment as a strategic pivot toward AI, despite a lower-than-expected valuation.
NICE Ltd. has been underperforming for several years. In three of the past four years, the tech company's stock fell by double digits, and its yield since the beginning of 2026 has been flat. However, since hitting its recent low in June, the stock has climbed by over 40%, leaving the market wondering whether a significant turnaround is finally underway for the battered share.
Managed since early 2025 by Scott Russell, NICE provides customer engagement solutions (call centers) and financial crime compliance solutions. In 2021, its market capitalization peaked at around $20 billion, making it temporarily the largest Israeli company. Today, it stands far below that peak at $6.6 billion, falling out of the top ten largest Israeli firms.
The stock's weakness began with fears of intensifying competition in its core market—particularly from Microsoft—and continued with the departure of former CEO Barak Eilam. This year brought the "SaaSpocalypse," a sharp sell-off in software stocks driven by fears that artificial intelligence developments would disrupt their business models. Concerns focus on advanced AI models potentially undermining software-as-a-service (SaaS) companies like NICE, which rely on per-user subscription pricing models, or potentially rendering their operations obsolete altogether.
These fears have begun to fade, at least partially, in recent months, helping drive a recovery in battered tech shares. However, another major catalyst was reports that NICE is attempting to divest its financial crime risk management division, its subsidiary Actimize.
NICE paid $280 million to acquire Actimize in 2007. In 2025, NICE's revenues from Actimize reached approximately $485 million, representing 7% growth compared to 2024 and about 16.5% of total revenues. Operating profit stood at roughly $167 million, accounting for about 25.8% of total operating income. Second-quarter revenue growth reached 6%, totaling $137 million.
What Will Actimize Sell For?
Reports emerged about a year ago that NICE had hired investment banks to sell Actimize. In recent months, market estimates suggested potential buyers valued the unit at up to $2.5 billion. However, Sky News reported last week on advanced talks to sell Actimize to Canada's Brookfield asset management for approximately $2 billion. NICE has not commented on the report. While the news initially sparked a rally in NICE shares, the stock subsequently softened, likely because the reported price tag fell short of expectations.
"There is a lot of logic in selling Actimize," says Sergey Vasnetsov, senior analyst at Oppenheimer Israel. "NICE acquired it nearly two decades ago, leveraged it well, and expanded market share—Actimize largely took market share from Oracle and established itself as a profitable, leading player. But it has almost no synergies with NICE's core business; they involve different types of clients and distinct development tracks. It barely operates in the cloud because the financial sector faces heavy regulations and sensitivities, and organizations are slow to adopt cloud solutions. After capturing market share, its growth stabilized and is now lower than NICE's average, even though it is more profitable."
Analyst and investment manager Lior Wieder, founder and manager of the "Profit Multiple" info service, noted last week that "in May, reports indicated NICE received five different bids for Actimize from three private equity funds and two strategic entities, at a threshold of no less than $2.5 billion. At that time, NICE stock traded about 20% below its current price." Wieder estimated that the stock's recent gains stemmed from market expectations of progress in the talks. Nevertheless, he added that the price tag published by Sky News is lower than previously discussed thresholds, "and this is for a profitable division that serves as a major anchor and generates a substantial portion of the company's operating profit."
Strategic Focus on AI
Vasnetsov believes that despite the modest valuation, such a transaction would be positive for NICE. "NICE is pivoting toward AI. It acquired Cogningy [a company specializing in AI agents for customer service, ed.] and is progressing well," he said. "According to reports, selling Actimize will bring in about $2 billion, reflecting low software sector multiples—a price-to-sales multiple of 4 and an operating profit multiple of about 12. The market probably thought NICE could fetch more, but traditional software markets do not command high multiples today."
He estimates that "focus is what matters, and following the sale of Actimize, NICE will be 100% focused on its call center and AI operations, boasting an even stronger balance sheet that will allow it to execute further acquisitions to strengthen its position, possibly issue dividends, or buy back more of its own shares." At the end of the second quarter, NICE held $355 million in cash and zero debt, after generating $123 million from operations during the quarter.
Vasnetsov adds another positive point to selling Actimize: "NICE's growth profile without Actimize will be stronger. Excluding it, NICE will showcase higher growth, which is what investors care about and will improve their perspective on the stock."
On the flip side, the profitability profile will take a hit.
Vasnetsov counters: "This is not a vulnerability for NICE, which is a large, well-structured company that knows how to meet its targets. Even when it acquired loss-making companies, it brought them up to its corporate average, and I do not think it will have trouble improving profitability margins. Furthermore, all software companies are utilizing AI tools themselves to boost profitability."
"The Stock is Undervalued"
Does NICE stock represent an investment opportunity? Vasnetsov from Oppenheimer believes NICE is significantly undervalued. "Even after the stock's recent rally, it trades at low price-to-earnings and EBITDA multiples, and the cash it could receive from selling Actimize equals nearly a third of its market value. The market now understands SaaS companies will not vanish, and NICE is also emerging as a significant player in AI, with $362 million in annual recurring revenue (ARR) coming solely from AI." He also notes an ongoing recovery in NICE's specific market, UCaaS (Unified Communications as a Service).
"The stock has indeed staged a healthy recovery since its June low, but looking over the past 12 months, it still registers a decline of about 30%, " notes Wieder. "At current price levels, the company trades at a price-to-earnings multiple of only about 10 for the current year and roughly 9 for next year, which is expected to be stronger both commercially and financially. In my estimation, this represents a clear undervaluation, driven primarily by market concerns over a slowdown in cloud growth momentum (around 14%), alongside uncertainties stemming from growing competition by new AI tools entering enterprise software."
During the first half of the year, NICE's net profit dropped 14.6% to $321 million (Non-GAAP) due to increased investments, but net profit per share declined at a milder rate of 9.2%. Wieder noted that NICE's aggressive share buyback program mitigates the impact of lower net profit on earnings per share. "Weighing the data, the risk-reward ratio for investing in NICE over the medium and long term clearly tilts positive," Wieder concludes. "The stock suits patient investors with fortitude who trust management's ability to successfully navigate the business transition and steer through the turbulent waters of the artificial intelligence revolution."
