When it comes to stocks for artificial intelligence (AI), there is no shortage of options. Between hyped-up technical giants and flashy new AI startups it is easy to be distracted. But for my money, Open text (TSX: OTEX) is the Canadian powerhouse under the radar that makes me more enthusiastic than any other AI investment on the market today.
About OpenText
Of course, OpenText does not scream “AI” as some Silicon Valley names do. Yet that is exactly why it is so mandatory. This company -based company has steadily embedded AI in its huge series of industrial tools, not as a marketing stunt, but as a fundamental pillar of the long -term growth plan. While others chase newspaper heads, OpenText builds infrastructure on which global companies are already trusting, with AI as a motor that drives the next phase.
Let’s get rid of the hard songs. In the last winning release for the third quarter (Q3) of Fiscal 2025, OpenText reported $ 1,254 billion in total turnover. That has fallen 1.3% year after year, largely because of the AMC repellent. But when you throw that away, the decrease was only 4.5%. In the meantime, the cloud income rose by 1.8% to $ 463 million, which marked the 17th consecutive quarter of cloud organic growth.
What is even more important, OpenText continues to generate considerable free cash flows. In the Q3 alone, it placed $ 374 million in free cash flow, an increase of 7.4% year after year. Adapted income before interest, taxes, depreciation and amortization (EBITDA) came to $ 395 million with a solid margin of 31.5%. This is not technical shares that chases income at the expense of profitability. It is steadily optimizing, saving costs, integrating acquisitions and automating operations. In fact, the business optimization plan is expected to yield $ 490 to $ 550 million in annual savings as soon as they have been fully implemented.
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OpenText’s recently launched Titanium X platform is the crown jewel here. It is a next generation of software as a service (SaaS) and hybrid solution that allows customers to make smarter decisions with OpenText Aviator AI. See it this way: while other companies are building AI for tomorrow, OpenText AI integrates into today’s real workflows. Content management, cyber security, compliance, these are not optional functions for Fortune 500 companies; They are supplies. And OpenText gives them AI-driven aids to make it better, faster and with less manual efforts.
CEO Mark Barrechea is clear about where the technical shares are going and explains: “We continue to prove the criticism of OpenText products and the resilience of our business model.” He also emphasized the role of AI and said that the company reinvests for the long term in “Ons Aviator AI platform, content, security and cloud growth products.” CFO Chadwick Westlake was even Botter: “It is an exceptional time for investors to participate in the profit growth motor we build at OpenText.”
And that’s just that. This is no longer just a document management company. It is an AI-First Business Cloud Company with $ 1.28 billion in cash, a growing cyber security division and an aggressive share of re-hall plan. Last quarter, OpenText returned $ 183 million to shareholders, including $ 68 million in dividends and $ 115 million in share purchasing.
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Critics can indicate the decrease in income, but this lacks the forest for the trees. OpenText has reoriented its entire business post-Micro Focus Acquisition and Post-AMC disposal. The headwind in the short term is transition. The long -term vision? A slimmer, AI-Revers, cash-generating technical machine.
And like a Canadian investor that is rare. We do not have many softwareititans who play on this scale, especially not those who lead in AI, cyber security and Enterprise Cloud. The current dividend of OpenText of $ 0.2625 per quarter also offers a decent return, while investors wait until the income is rearranged.
There is a calm confidence in the implementation of OpenText that distinguishes it. It does not chase the AI -Hype cycle. It closes intelligence in the core of how companies work, and that is where the real money will be earned.
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