Nice – Earlybirds Invest

Nice’s perfectly fine results dismay the market

Nice is home to three cloud platforms powered by artificial intelligence (AI) and specializing in customer experience (particularly contact center services), financial crime and compliance, and public safety and justice.

Multiple industry experts recognize Nice as a leader within each specialty, and the company counts 85 of the Fortune 100 as customers.

While revenue rose “only” 6%, Nice’s cloud sales (which equal three-quarters of its total revenue) grew by 12% during Q1. Said another way, Nice’s smaller and less critical products and services sales continued shrinking, but its core cloud business remained strong.

However, this was the first time in three years that the company’s cloud sales didn’t grow quarter over quarter, which might explain the market’s harsh reaction.

Most importantly, though, Nice saw revenue related to AI and self-service rise 39% in Q1. In my opinion, this is the most important takeaway from the earnings call, as it shows Nice’s ability to incorporate AI into its already market-leading cloud platforms.

Trading at just 18 times free cash flow — even after accounting for stock-based compensation — Nice has a new $500 million stock buyback plan that could help increase shareholder value.

This balance between capital allocation and Nice’s leadership position in burgeoning niches makes the company an intriguing and potentially discounted growth stock.

OpenAI has rolled back a recent change to ChatGPT after many users complained it made the chatbot overly agreeable and full of praise, even when it did not make sense.

The update, aimed at improving the assistant’s personality, had the opposite effect for many. In X’s post shared on April 29, OpenAI said the chatbot had become “overly flattering or agreeable—often described as sycophantic”, and confirmed it had now returned to an earlier version.

CEO Sam Altman also noted that free users had already been switched back, with paid users to follow soon.

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The issue, according to OpenAI, was caused by focusing too much on short-term positive feedback. The team had trained the model to respond in ways that earned more “thumbs-up” from users, but did not consider how opinions might change over time.

To fix the problem, OpenAI is adjusting how it trains and evaluates future versions of ChatGPT. This includes updating the system’s instructions, changing how it responds to user feedback, and testing future updates with more people before they go live.

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The company also said it plans to improve its internal review processes to catch tone problems earlier and to “build stronger guardrails” that keep responses more honest and balanced.

Meanwhile, the r/changemyview subreddit recently discovered an unauthorized study conducted by researchers from the University of Zurich that used AI-generated comments. How did Reddit respond? Read the full story.