OpenText Corporation (TSX: OTEX) stock surged 13% in September and continued its rally in October, reaching a new 52-week high of $54.20. This is the first time since January 2024 that the stock has crossed the $50 mark, hinting at an improvement in fundamentals.
OpenText has been innovating its information management solutions for Cloud, Security, and artificial intelligence (AI) markets. As part of this transition, it has been divesting non-core businesses. In May 2024, it divested its Application Modernization and Connectivity (AMC) Business to Rocket Software for US$2.3 billion. In October 2025, it divested its on-premise solution (eDOCS) to NetDocuments for US$163 million in cash. It has been using the proceeds to reduce debt and invest in AI and cloud.
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Behind OpenText stock’s September rally
This transition to the cloud saw a decline in revenue from divested businesses. It was the first time in two years that the company provided revenue guidance of 1–2% for fiscal 2026 in its August 7 earnings call for fiscal 2025. That triggered a recovery after a 34% dip between February 2024 and July 2025. OTEX stock has surged 32% in August and September and continues to rally.
Savings on interest expense, divestiture of non-core business, and management’s focus on improving its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin and free cash flow make it a stock to hold throughout the recovery.
