logo
Open Text Corporation (OTEX): Among Overlooked Tech Stocks to Buy Now

Open Text Corporation (OTEX): Among Overlooked Tech Stocks to Buy Now

Yahoo04-05-2025
We recently published a list of . In this article, we are going to take a look at where Open Text Corporation (NASDAQ:OTEX) stands against other overlooked tech stocks to buy now.
After overcoming major macroeconomic challenges, the IT sector has started 2025 with fresh vigor. The tech sector is now ready for a resurgence after a period of instability characterized by high inflation, rising interest rates, and worldwide unpredictability. The sector is expected to be 'healthy' or 'very healthy' in 2025, according to 62% of tech executives polled by Deloitte. Global IT spending is expected to increase by 9.3%, driven mostly by double-digit growth in software and data center investments. As companies move AI initiatives from pilot projects to full-scale production deployments, analysts anticipate that generative AI, cybersecurity, and cloud services will continue to be important growth drivers.
The rate of layoffs dropped significantly in 2024, indicating growing stability. But new difficulties have surfaced, especially in relation to geopolitical tensions and regulatory barriers. The world economy is already feeling the effects of President Trump's expansive tariff plans, which include additional charges on major tech manufacturing countries like Taiwan, India, and Vietnam that range from 26% to 49%. Although imports of semiconductors, which are essential for the development of AI, have been temporarily exempted, tech companies that rely on international supply chains face new risks as a result of the unstable trade policy climate.
Meanwhile, generative AI is proving to be a double-edged sword. While it is projected to contribute 21% to U.S. GDP by 2030, as reported by the World Economic Forum, there are growing concerns about the technology displacing millions of jobs, particularly administrative roles. As the World Economic Forum highlights, the solution lies not in halting AI innovation but fostering 'Authentic Intelligence'—an approach emphasizing the collaboration of human critical thinking with AI's capabilities to ensure inclusive economic growth.
Additionally, cybersecurity has become a significant priority on the strategic agenda. As the use of AI increases, so does the attack surface available to hackers. By 2028, it's expected that global spending on cybersecurity will exceed $200 billion, as businesses emphasize bolstering their defenses. However, only 24% of existing gen AI projects are thought to be sufficiently secure, indicating that trust is still a major obstacle to the widespread use of AI.
In summary, despite the fact that 2025 holds great promise for the IT industry due to advancements in generative AI, cloud migration, and robust IT investment, businesses still have to deal with a complex web of ethical, geopolitical, and legal issues. Successful companies will strike a balance between daring technological innovation, careful risk management, strategic supply chain diversity, and a dedication to upholding stakeholder and customer confidence.
Against this dynamic backdrop, let's look at 10 Overlooked Tech Stocks to Buy Now, which are not only ready to capitalize on upcoming opportunities but may also provide attractive upside potential for investors seeking beyond the conventional mega-cap giants.
To find overlooked tech stocks, we started by looking for companies with a market capitalization greater than $5 billion, ensuring a concentration on financially strong, large-cap enterprises. We chose stocks from this category that had a price-to-earnings (P/E) ratio of less than 15, using the P/E ratio as a conventional valuation indicator to highlight relatively affordable earnings-driven stocks. We then evaluated these firms based on hedge fund sentiment, utilizing data from Insider Monkey's fourth quarter 2024 report. Finally, we chose the ten companies with the least number of hedge fund investors to represent our list of Overlooked Tech Stocks to Buy Now.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a cyber security hardware device used for protection.
P/E Ratio: 6.4
Hedge Fund Holders: 14
Open Text Corporation (NASDAQ:OTEX) is a major provider of information management and cybersecurity solutions to global enterprise clients. Headquartered in Waterloo, Canada, the company's diverse portfolio includes content management, AI-powered analytics, cybersecurity, cloud services, and supply chain automation, with over 120,000 customers worldwide.
Open Text Corporation (NASDAQ:OTEX) reported $1.33 billion in revenue and $501.5 million in adjusted EBITDA in fiscal Q2 2025, for a margin of 37.6%. Free cash flow totaled $307 million, and the company completed the quarter with $1.12 billion of cash. The company returned $258 million to shareholders through share repurchases and increased its fiscal 2025 share buyback authorization by $150 million, bringing it to $450 million. Cloud revenues increased 2.7% year-over-year, driven by a record $250 million in new cloud contract bookings.
Open Text Corporation (NASDAQ:OTEX) expanded its cybersecurity solution by launching Core Threat Detection and Response on February 20, 2025. The new AI-powered technology, which integrates with Microsoft Azure and Security Copilot, improves threat detection across hybrid cloud settings.
The Cybersecurity Cloud now serves more than 7,500 enterprise clients, establishing Open Text Corporation (NASDAQ:OTEX) as a market leader in next-generation security solutions.
Management confirmed its fiscal 2025 free cash flow projection of $600 to $650 million, while marginally decreasing sales expectations to $5.175 billion to $5.27 billion. Importantly, Open Text Corporation (NASDAQ:OTEX) anticipates a return to total revenue growth in Q4, led by cloud, security, and AI projects based on its Titanium X platform.
With strong momentum in its cloud and cybersecurity businesses, aggressive capital returns, and improved operational efficiency, Open Text Corporation (NASDAQ:OTEX) is developing as an overlooked tech stock with the ability to deliver long-term shareholder value.
Overall, OTEX ranks 2nd on our list of overlooked tech stocks to buy now. While we acknowledge the potential of OTEX, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than OTEX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

MrBeast CEO and 'Beast Games' winner rally brand partners and rare disease support on Wall Street
MrBeast CEO and 'Beast Games' winner rally brand partners and rare disease support on Wall Street

Yahoo

time11 minutes ago

  • Yahoo

MrBeast CEO and 'Beast Games' winner rally brand partners and rare disease support on Wall Street

NEW YORK (AP) — MrBeast's new CEO hit Wall Street Wednesday as YouTuber Jimmy Donaldson's media empire looks to develop long-term brand partnerships and, in turn, unlock more funding for its charitable content. Venture capitalist Jeff Housenbold took over MrBeast leadership last summer with a mandate to professionalize an ever-growing entertainment company. YouTube's most popular creator had reached record audience levels far outpacing its startup days, while vowing to reassess its internal culture amid multiple controversies. But, despite joining Nasdaq's closing bell ceremony on Wednesday, Housenbold said their strategic plan does not currently include a public offering — or any active funding rounds. 'Do I want to make banger content? Yeah. That's cool," Housenbold told The Associated Press. "But what can we do with that banger content? Generate profits, make a sustainable business that gives us greater ability to impact people's lives around the world.' 'We're marching quickly to profitability, so we don't have to raise additional capital,' he added. Instead, MrBeast is focused on securing multi-year exclusive advertising deals as opposed to single-video brand partnerships. With 416 million subscribers and legions of impressionable young fans, Housenbold argued that MrBeast is uniquely positioned to deliver more bang for companies' marketing bucks by pointing that 'firehouse of attention' at them. Along the way, Housenbold said he is encouraging Donaldson to tout the channel's charitable works — which often feature quantifiable stunts such as building wells, removing ocean plastic or covering cataract surgery costs. The company, in his view, 'can do good while doing well.' 'The more people who like us 'cause we do good, the more people watch our videos," he said. 'The more people watch our videos, the more we're able to drive in fees from our advertising partners... the more we can invest in more content to do more good in the world.' New projects such as the Amazon Prime reality show and a James Patterson novel from HarperCollins aim to diversify the genders and ages of his audience. Housenbold said that base has historically consisted mostly of 8-to-25-year-olds and men. But Housenbold acknowledged missteps in last year's production of 'Beast Games," which prompted allegations of 'unsafe' conditions from some contestants who said an unorganized set led to injuries, irregular food provision and lacking access to medication. While describing most of those reports as 'inaccurate,' Housenbold said they were 'better prepared' for the second season's recently wrapped shoot. 'Building sets for a 10-episode show is different than a 22-minute YouTube video," he said. "The scale, the size, the sophistication, the safety, the security, the cost effectiveness of doing that. We didn't staff up enough for Beast Games.' Ringing Nasdaq's closing bell Wednesday with Housenbold was the winner of the $10 million grand prize awarded in that inaugural 'Beast Games' season. Jeffrey Allen, the father of a child with creatine transporter deficiency, has promised to put some of his winnings toward existing treatments and research for a cure to the rare genetic disorder. He said the Association for Creatine Deficiencies, where he is a board member, added 1,000 new donors in the weeks following the final 'Beast Games' episodes' release. He hopes Wednesday's visit will draw more attention and money to all rare diseases. 'This is where companies that are bringing true change to the marketplace come to listen to other companies," Allen said. "So, there's no better place for a budding rare disease nonprofit to come and show, 'Hey we're trying to change the world, too.'' ___ Associated Press coverage of philanthropy and nonprofits receives support through the AP's collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP's philanthropy coverage, visit Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Trump's Japan Trade Deal Raises Fears He Gave Away Too Much
Trump's Japan Trade Deal Raises Fears He Gave Away Too Much

Yahoo

time11 minutes ago

  • Yahoo

Trump's Japan Trade Deal Raises Fears He Gave Away Too Much

(Bloomberg) -- US industries and protectionists are raising alarms with President Donald Trump's pact with Japan, saying it risks undercutting his stated goals of rebalancing America's trading relationships and reviving domestic manufacturing. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom Trump and his top negotiators on Wednesday hailed the deal as a potential model for other countries hoping to win tariff concessions, citing Tokyo's pledge to create a $550 billion fund for US investments. The president's decision to grant Japan relief on automobiles, however, provoked criticism that the agreement wouldn't address the main source of the US's trade deficit with Japan even as it disadvantages Detroit's Big Three. Around 80% of the US-Japan trade gap is in cars and car parts. Tuesday's announcement marked the latest signal that Trump is willing to negotiate on industry-specific duties on products including chips and pharmaceuticals, potentially undermining the most durable pillar of his tariff strategy. The reaction underscores the risks of the president's transactional negotiating style. Industries that have championed much of Trump's trade strategy and stand to benefit from robust levies on foreign rivals could be left in the lurch as his plans shift. 'Any deal that charges a lower tariff for Japanese imports with virtually no US content than it does North American built vehicles with high US content is a bad deal for the US industry and US auto workers,' said Matt Blunt, president of the American Automotive Policy Council that represents Ford Motor Co., General Motors Co. and Stellantis NV. Trump defended his approach, which resulted in a deal to reduce Japan's country-specific rate to 15% and put US levies on cars and parts at the same level — lower than the 25% global charge on vehicles. 'I WILL ONLY LOWER TARIFFS IF A COUNTRY AGREES TO OPEN ITS MARKET. IF NOT, MUCH HIGHER TARIFFS! Japan's Markets are now OPEN (for first time ever!). USA BUSINESSES WILL BOOM!' Trump posted. His Commerce Secretary, Howard Lutnick, argued in a Bloomberg Television interview on Wednesday that it was also ratcheting up pressure on South Korea and Europe to make additional concessions or risk their automakers being left at a significant disadvantage. And White House Press Secretary Karoline Leavitt said Trump's approach was breaking down barriers for US products abroad. 'Thanks to President Trump, these countries around the world are agreeing to open their markets to American-made products and goods for the first time, which will lead to a boom in sales and profits for American businesses right here at home,' she told reporters Wednesday. Even so, automakers and other industry stakeholders were crying foul Wednesday. They warned that giving Japan an unlimited reduction on auto tariffs undermines the use of those levies not just for cars, but also metals, semiconductors and other goods. 'Unlimited imports at tariff rates below existing Section 232 rates critically undermine the security objections' of the law and in many cases will actually encourage offshoring, said Jon Toomey, executive director of the Coalition for a Prosperous America, an advocacy group representing import-threatened industries that supports tighter trade controls. The provision on Japanese autos is far more expansive than the steel and aluminum tariff reduction Trump gave the UK, which allows a limited quota of imports to enter the US at a reduced rate. Industry-specific tariffs imposed under Section 232 of the Trade Expansion Act are seen as a more lasting tool than Trump's country-based tariffs for boosting the competitiveness of US-made goods, since they rest on stronger legal footing, and some have endured across multiple presidencies. Industry groups also say the product-specific rates provide certainty needed to drive investment in domestic manufacturing plants. Other countries already are clamoring for sectoral tariff relief, and the US-Japan trade deal sends a signal that they are up for negotiation, people familiar with the matter said. Two of those individuals predicted the agreement will also add leverage to the auto and oil industries' pleas for relief from steel duties. 'It doesn't make sense to allow for unlimited vehicle imports at 15%, while charging rates of 25% on auto parts and 50% on steel,' Toomey added. It's also unclear how and when the $550 billion investment fund might come to pass — or if it will prove to be as illusory as investment pledges Trump secured during his first term from China in exchange for scaling down tariffs. Although Beijing promised in 2020 to buy $200 billion in additional US agricultural commodities and other goods, ultimately only 58% of those purchases materialized amid the pandemic, according to the Peterson Institute for International Economics. Trump administration officials cast the Japan deal, as well as frameworks with Indonesia and the Philippines, as incentive for other major partners, including the European Union and South Korea, to bring their best investment and purchasing pledges to the table. 'It spurs other deals along,' White House trade adviser Peter Navarro said in a Bloomberg Television interview. Treasury Secretary Scott Bessent made clear the investment plan helped Japan secure its tariff reduction, telling Bloomberg Television: 'They got the 15% rate because they were willing to provide this innovative financing mechanism.' Lutnick said on the network that under the arrangement Japan will serve as a financier providing equity, loans and other support for manufacturing plants, infrastructure and other projects in the US. Other countries will be under pressure to follow the investment model, said a senior administration official who asked for anonymity because details haven't been formally announced. The investment deals could prove especially attractive to Trump, who frequently extols planned spending in the US announced since his January inauguration. The president and top administration officials also regularly tout the surge in revenue from new tariffs, which have already brought in $113 billion this year, according to the Treasury Department. The US-Japan deal's emphasis on investment suggests the promise of more revenues has taken priority over the push to protect domestic industries, one person familiar with the matter said. While direct foreign investment in the US could help expand domestic manufacturing and artificial intelligence capacity, it won't necessarily make the country's exports more competitive on its own. And some analysts raised doubts about whether Japan's promises to open its markets to US products would prove meaningful. The administration cast Japan's concession to accept cars made to US federal motor vehicle safety standards instead of subjecting them to additional regulatory requirements as a boon for Detroit. Even so, a major impediment to US auto sales in Japan is the American designs themselves — not just trade barriers. Put simply, Japanese consumers are less interested in driving Fords and GMs than Americans are in Toyotas and Hondas. Japan sells the US about 84 cars for every one the US sells there. 'American cars that are big just don't comport well with the needs, desires and demands of the Japanese public' said Colin Grabow, an associate director at the Cato Institute's trade policy center. 'It's unclear what the payoff here is.' --With assistance from Keith Laing, Hadriana Lowenkron, Joe Mathieu, Tyler Kendall and Stephanie Lai. Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Trump just announced a new AI plan that scraps Biden's rules — and gives Big Tech a green light
Trump just announced a new AI plan that scraps Biden's rules — and gives Big Tech a green light

Tom's Guide

time12 minutes ago

  • Tom's Guide

Trump just announced a new AI plan that scraps Biden's rules — and gives Big Tech a green light

The White House has just released a sweeping new AI roadmap titled America's AI Action Plan, outlining how the federal government will try to supercharge AI development in the coming decade. The plan, backed by President Trump, prioritizes national security, infrastructure expansion and fewer regulations, which positions AI as the backbone of future U.S. economic and technological leadership. But this aggressive push for AI supremacy could come at a cost, particularly for states that aim to regulate AI more strictly, and other parts of the plan raise concerns about free speech. In short, the U.S. wants to build AI systems faster and export them under favorable terms, while locking down competitive advantages at home. At the heart of the plan are three pillars: One of the most controversial pieces of the plan is its deregulatory stance. The federal government wants to eliminate what it calls 'burdensome red tape' and may withhold federal AI funding from states that implement stricter AI oversight laws. That means if a state passes strong privacy or data transparency laws around AI, it could lose access to federal money intended to support AI development, workforce training or infrastructure. For consumers, this could translate to a boom in AI-powered tools: smarter assistants, faster services and more innovation reaching your devices. It also opens the door for AI to play a bigger role in everything from healthcare and education to smart homes and city planning. Get instant access to breaking news, the hottest reviews, great deals and helpful tips. But the plan also raises concerns about data privacy, environmental impacts and lack of public oversight, especially as AI systems become embedded in daily life. The plan does acknowledge workforce disruption. It outlines new programs to retrain workers for AI-adjacent jobs, especially in trades like electrical work, HVAC installation and robotics maintenance. Unlike earlier federal tech plans, this one appears to focus less on white-collar upskilling and more on supporting the physical infrastructure of an AI-driven economy. Trump's plan places a unique emphasis on combating perceived 'ideological bias' in AI systems, an issue largely absent from Biden's formal policy language. The proposal accuses current AI models of being 'programmed by the radical left' and calls for the creation of standards to ensure political neutrality in outputs. This includes potential mandates requiring AI models to disclose training data sources and undergo third-party audits for viewpoint bias. The emphasis on ideological balance appears designed to resonate with conservative voters concerned about fairness in emerging technologies. However, how these measures would be implemented and whether they can be reconciled with First Amendment protections remains to be seen. The Trump administration's new America's AI Action Plan marks a major departure from the Biden-era playbook. One of Trump's first moves was scrapping Biden's 2023 executive order, which focused on putting guardrails around AI. Biden emphasized safety testing, algorithmic transparency and civil rights protections through agencies like the FTC and Department of Commerce, Trump has scraped all of that, leaning heavily into deregulation. The new order frames Biden's approach as too restrictive and instead aims to strip away what it calls 'burdensome' policies that could slow down AI innovation. Rather than requiring companies to prove their systems are safe or equitable, the emphasis is now on speeding up infrastructure development, including fast-tracking data centers and chip manufacturing plants. The America's AI Action Plan is a new roadmap for scaling U.S. AI capabilities, but it also sets up future legal and political battles over states' rights, privacy protections and AI accountability. As the federal government puts billions behind building the AI economy of tomorrow, the question remains if this will make our tech smarter and life easier or just less transparent.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store