The Ultimate Software Stock to Buy With $500 Right Now

Here’s why OpenText (TSX:OTEX) looks like a top buying opportunity for growth investors looking to put their next $500 to work.

| More on:
A worker uses a double monitor computer screen in an office.

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There actually happen to be a number of great software stocks available on the TSX right now for investors looking to add a top growth stock to their portfolio. However, I’ve had my eye on OpenText (TSX:OTEX) for some time now as a top software name with a long history of growth and stability.

Created with Highcharts 11.4.3Open Text PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Let’s dive into why OpenText may be a great option for investors looking to put their next $500 to work in a stock they intend on holding for a significant period of time. I should note that this is a company I’d characterize best as a longer-term holding for a number of reasons.

An enterprise information management leader

Waterloo-based OpenText is a world leader in providing enterprise information management solutions. The company develops software aimed at helping organizations manage and analyze a wealth of information ranging from documents and emails through digital media and records.

OpenText has a wide-ranging customer base from various sectors, including finance, healthcare, manufacturing, and retail. The company’s solutions are generally considered to be mission-critical for organizations that need to streamline operations, meet regulatory requirements, and make data-based decisions. As with other EIM software, its demand is escalating in this digital-first marketplace. 

Many organizations are leaning toward software solutions that OpenText provides for these reasons. Thus, given the mission-critical nature of the solutions OpenText provides to customers seeking to modernize operations, enhance efficiency, and put forth their competitive edge, this is a company that has plenty of “stickiness” in the marketplace and makes this stock one that I think could be a winning investment for those thinking long term.

A growth-by-acquisition strategy

Like other top software stocks on the TSX, OpenText has seen incredible success over the long term, mainly due to the company’s growth-via-acquisition strategy. The company has made a number of acquisitions to widen its product portfolio and customer base. Some notable deals include the acquisition of Documentum, Carbonite, and, most recently, Micro Focus.

The transformational acquisition of Micro Focus in 2023 at an attractive value of $6 billion gave OpenText a significant boost in scale and capabilities. It brings in an incredible suite of enterprise software solutions for OpenText’s portfolio through IT management, computer security, and analytics. The Micro Focus integration is expected to create substantial upside potential to enable profit and GL to shareholders.

In addition, the company is in the business of identifying firms that will complement its ongoing offering and allow for an opportunity for operational refinements. OpenText is committed to drawing value from its acquisitions based on its combination experience and continues on its helter-skelter course of viability. 

Bottom line

Overall, OpenText is a top-tier technology stock that combines the growth potential of the software industry with the stability of a recurring revenue model. The company’s proven acquisition strategy, strong cash flow, and commitment to shareholder value make OTEX stock an excellent potential investment for those looking to deploy $500 in the market right now.

Should you invest $1,000 in OpenText right now?

Before you buy stock in OpenText, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and OpenText wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

ways to boost income
Tech Stocks

How I’d Invest $11,500 in Canadian Fintech Stocks to Revolutionize My Finances

Propel Holdings stock's recent dip could be a trading opportunity for long-term financial gains. Here's why the fintech stock is…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

The Only 2 AI Stocks You’ll Need for Long-Term Growth

Here are two top Canadian tech stocks that could help you benefit from surging demand for AI technology and infrastructure.

Read more »

calculate and analyze stock
Tech Stocks

The Canadian Stock I’d Buy Every Time it Takes a Dip

The tariff wars have created a buy-the-dip opportunity for value investors. Here is a Canadian stock that is a buy…

Read more »