When investors think of artificial intelligence (AI) opportunities, they often turn to flashy start-ups or high-risk meme stocks. But one established Canadian company has quietly positioned itself as a serious AI contender — and it’s been laying the groundwork for decades.
That company is OpenText (TSX:OTEX), a long-standing tech player that’s now making aggressive moves into the AI space. Despite its recent advancements, the stock remains attractively priced, offering investors a strong entry point with potential for substantial long-term gains.
What’s Driving the Momentum?
OpenText is expanding far beyond its traditional cloud services into advanced AI capabilities. The company recently partnered with Hewlett Packard Enterprise (HPE) to roll out scalable AI solutions, and its Titanium X program is already making waves. This initiative is designed to improve enterprise data intelligence and streamline decision-making processes — effectively helping businesses operate smarter and more efficiently.
These innovations make OpenText a more appealing partner for enterprise clients, opening the door to sustained growth over the next decade.
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Recent Earnings Snapshot
The company’s latest earnings report showed mixed results. While overall revenue declined 10.4%, largely due to reduced customer support revenue from divestitures, cloud revenue increased by 2%, showing strength in its key strategic areas. That resilience underpins OpenText’s long-term AI potential.
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Looking Ahead
The company’s collaboration with HPE gives it a significant advantage in deploying secure, compliant, and scalable AI technologies globally. This positions OpenText as a reliable provider of transformative AI solutions in a market that’s rapidly expanding.
On top of its growth story, OpenText offers income as well — the company recently raised its dividend by 5%, maintaining a healthy 64% payout ratio. A $7,000 investment today could generate approximately $233 annually, paid out quarterly.
Management Confidence
To support its AI and cloud growth strategy, OpenText recently appointed James McGourlay as interim CEO, signaling a focus on execution in its core areas. Reinforcing that confidence, the company has also repurchased $300 million in shares, demonstrating strong belief in its future value.
While near-term performance may be mixed, OpenText’s long-term AI strategy and solid fundamentals make it one Canadian tech stock to watch closely — and potentially, the country’s next big AI winner.
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