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1 Canadian Stock That Could Be the Next Big AI
Solid Cash Flow, AI Platform, Shareholder Returns—Why OTEX Could Be the Canadian AI Bet
Shayaan Rajan & Qayyum Rajan
September 09, 2025
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OpenText Corporation (TSX: OTEX)
🌐 Visit Website | WealthAwesome Stock Page → OTEX.TO
Major Developments This Week
Q4 Fiscal 2025 Earnings Beat Expectations: OpenText reported Q4 total revenues of USD 5.168B, with cloud revenues rising 2.0% YoY and enterprise cloud bookings surging 32% YoY, fueled by demand for its AI-driven Titanium X platform.
Capital Returns Accelerate: The company announced a 5% dividend hike, a USD 300M share repurchase plan, and a record USD 683M in capital returns to shareholders.
AI & Cloud Growth Outlook: Management projects 3–4% cloud revenue growth and 1–2% total revenue growth in FY2026, as AI, cloud, and security remain strategic priorities.
Leadership Update: James McGourlay was named interim CEO, signaling potential strategic shifts at the top.
Key Metrics (as of Monday's Close)
Metric | Value |
|---|---|
Stock Price | C$46.67 (+1.40%) |
Market Cap | C$11.87 B |
P/E (TTM) | 20.5× |
Forward P/E | 10.4× |
52‑Week Range | C$32.41 – C$47.52 |
YTD Return | +17.9% |
Dividend Yield | ~3.2% (forward) |
Analyst Insights & Ratings
No consolidated analyst rating available currently for OTEX. However, the company’s strong fundamentals and shareholder-friendly actions reinforce its appeal in the AI/cloud playbook.
Recent Headlines
Strong Earnings & AI Momentum: The Q4 report highlighted AI-led cloud booking growth, dividend hikes, and reinvestment into key platforms.
Leadership Transition: James McGourlay appointed interim CEO, setting the stage for strategic leadership evolution.
Capital Returns & Share Repurchases: With $683M returned via dividends and buybacks, the company is balancing growth with shareholder value.
Growth Indicators
Growth Metric | Value |
|---|---|
Sales Growth (Next Year) | ~1.5% |
EPS Growth (Next Year) | ~8.4% |
5-Year EPS Growth Estimate | ~7.7% |
Cloud Bookings Growth (Q4 YoY) | +32% |
FY2026 Cloud Revenue Outlook | +3–4% |
Why OpenText Stands Out
AI-Driven Cloud Momentum: Titanium X platform is fueling rapid cloud bookings and modernizing offerings.
Strong Shareholder Returns: Dividend hike + repurchase plan reflect confidence and capital discipline.
Value Plus Growth: Attractive forward P/E (~10×) supported by solid profitability and cash flow.
Defensive Yet Innovative: Established software revenue base with fresh AI and cloud growth tailwinds.
Warning Considerations
Platform Transition Risks: Integrating AI across a legacy-based platform requires execution.
Macro Sensitivity: Software spending is vulnerable in an uncertain economic climate.
Leadership Rotation: Interim CEO signals transition—longer-term strategy may evolve.
Final Take
OpenText is increasingly aligning with enterprise AI and cloud trends—while maintaining strong cash generation and shareholder returns. With a compelling growth outlook and attractive valuation, it’s worth watching for investors seeking a Canadian tech stock with defensive roots and AI upside.
The Wealth Awesome Team
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