Turning your Tax-Free Savings Account (TFSA) into a millionaire’s portfolio might seem like a long shot. But it all starts with picking the right stocks and giving them time to grow. With artificial intelligence (AI) taking centre stage across industries, tech stocks with real-world applications and steady revenue are prime candidates. One Canadian company leading the charge is OpenText (TSX:OTEX). It may not have the flash of newer AI startups, but it has all the tools to thrive during the next bull market and power long-term TFSA growth.
About OpenText
OpenText has been a reliable player in the enterprise software space for decades. It helps large businesses manage digital information, everything from documents and emails to security and compliance. Recently, the AI stock pivoted aggressively into cloud and AI, embedding AI into its core products to help businesses automate and make smarter decisions.
In its most recent earnings report for the third quarter of fiscal 2025, OpenText reported revenue of US$1.25 billion. That was slightly below analyst expectations, but the more important figure was its adjusted earnings per share (EPS), which came in at US$0.82. That beat estimates and showed solid control over costs. Recurring revenue made up 83% of the total, including US$457 million from cloud subscriptions. For investors, that level of predictability matters. It gives the AI stock a stable cash flow to reinvest in growth, pay down debt, and return capital to shareholders.
Here for investors
Speaking of returns, OpenText paid out US$69 million in dividends and bought back 7.7 million shares during the quarter. It’s on track to return about US$570 million to shareholders in 2025. That includes dividends and buybacks, giving investors a mix of income and potential upside. The annual dividend sits at around $1.44, at a 3.66% yield as of writing.
OpenText trades at about $39 per share with a market cap of just over $10 billion. Its price-to-earnings ratio is just under 12, which looks cheap for an AI stock that’s delivering consistent profit and has a growing AI strategy. Analysts expect earnings growth of around 7.4% annually, with return on equity projected near 27% in the next three years. That combination of income, growth, and reinvestment makes it a compelling choice for a long-term TFSA.
Future in focus
AI is no longer hype for OpenText. Its platform includes AI Aviator, which brings automation to enterprise search, contract analysis, and customer service. It also helps businesses detect and defend against cyber threats using machine learning. These are not science projects. They’re fully integrated features used by major companies across industries.
The AI stock has also taken steps to streamline operations. In 2024, it announced a restructuring that included about 1,200 layoffs. While tough, the move is expected to save up to US$200 million per year, which improves margins and supports its long-term growth plans. That’s also freed up about US$50 million annually for innovation, product development, and AI expansion.
Next up for OpenText is its fiscal fourth quarter earnings report, expected in late July. That could provide more clarity on how its AI and cloud strategy is evolving. If the AI stock continues to deliver steady revenue and profit growth while keeping costs in check, it could earn more attention and a higher valuation during the next bull run.
Bottom line
For TFSA investors looking to build long-term wealth, OpenText is an attractive option. It offers strong fundamentals, a growing role in AI, dependable dividends, and shareholder-friendly management. It’s the kind of AI stock that won’t shoot the lights out in a week, but over years, it has real potential to compound steadily. If your goal is to turn your TFSA into something bigger, OpenText could be the type of AI stock that leads the charge when the market rallies again.
