Where Canada’s Real AI Opportunities Are Hidden

Two under-the-radar AI plays offer durable recurring revenue, AI advantages, and steady cash flow for long-term investors.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published October 7, 2025 8:00 pm EDT

| More on: DSGOTEX

Key Points

Descartes offers high-margin recurring logistics software and growing AI capabilities to boost routing and delivery efficiency.
OpenText's massive enterprise data assets and cloud growth drive strong cash flow, buybacks, and a rising dividend.
Both stocks trade under the radar but face macro, competition, and execution risks despite durable recurring revenue. Both stocks trade under the radar but face macro, competition, and execution risks despite durable recurring revenue.

It can be hard to get on a bandwagon that looks as though it has already left the station. However, that’s not always the case. When one area of the market grows, there are usually other areas that surge right along with it. These are offshoots that provide investment opportunities that are unlikely going to surge in share price only to come back down. No, these are solid long-term bets owing mainly to one thing: recurring revenue. So let’s look at two options for investors to consider on the TSX today.

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor. — Source: Getty Images

DSG

First up, we have Descartes Systems Group (TSX:DSG). Descartes is a software-as-a-service (SaaS) provider. It provides these services for logistics, transport, and global-trade workflows. This involves routing, tracking, customs filing, final-mile carrier solutions, and a connective Global Logistics Network used by shippers, carriers, and logistics providers.

Clearly, it has been doing this well, with the second quarter of 2026 coming in strong. The artificial intelligence (AI) stock reported a 10% increase in revenue to US$179.8 million, services revenue making up 93% of sales. Cash from operations also rose sharply, up 82% year over year to $63.3 million! Net income rose too, up 10%, with management closing small strategic acquisitions during the quarter, and a larger acquisition to expand final-mile inventory management.

Yet the AI stock remains hidden. It sits on a huge, industry-wide dataset, an ideal area for machine learning models to optimize routing, predict estimated times of arrivals and delays, detect fraud, allocate carriers, and more. And as mentioned, it offers a high recurring services mix to develop and buy AI capability to then roll it into subscription offerings. While it can be hit from macro risks such as trade and tariffs, as well as high costs, overall it’s a strong stock looking as though it’s eyes are headed towards future growth.

OTEX

Then we have OpenText (TSX:OTEX), an enterprise information management company that sells content management, information security, cloud services, and analytics to large organizations. It boasts new AI-driven platforms such as Titanium X, which has led to a large increase in cloud bookings.

This was seen during earnings as well, with full-year 2025 showing total revenue was up, hitting US$5.2 billion and cloud revenue rising to US$1.9 billion. Enterprise cloud bookings surged by 32%, with strong operating and free cash flow at $831 million and $687 million respectively. Even better for investors? The AI stock renewed a US$300 million share repurchase program and a 5% dividend increase.

So why does the AI stock remain under the radar? It’s again one that provides a service that, while not exciting, is essential. It controls massive volumes of enterprise documents, emails, logs and structured data across many industries. This data includes government agencies, proving its long-term worth. In fact, all this gives OTEX a potential edge versus general purpose AI vendors, as it can fine-tune models for its customers. All in all, it’s a solid investment among AI stocks that, while less exciting, is no less lucrative.

Bottom line

DSG and OTEX both look like hidden AI stocks that belong in pretty much any portfolio. DSG offers logistics for network data and high margin recurring revenue. OTEX is another solid AI stock thanks to its ownership of vast enterprise information stores. Together, these are credible AI stocks offering durable, recurring revenue that can defend against competition and even market volatility.