Missing out on NVIDIA (NASDAQ:NVDA) and its meteoric rise might feel like you've been left off the biggest artificial intelligence (AI) party of the decade. The stock has seen its valuation rocket into the stratosphere. Now trading at a forward price-to-earnings (P/E) ratio of 32.26, with investors banking on its dominance in AI and graphics-processing units (GPU) technology. But for those who've been priced out or are simply looking for a less volatile, more accessible alternative, OpenText (TSX:OTEX) may be the perfect candidate to fill that gap.

What happened?

NVIDIA stock undeniably captured attention with staggering growth. Its quarterly revenue ballooned by 122.4% year over year. It's the poster child for AI's potential. Yet, such hype comes with a hefty price tag and the risks of overvaluation. NVIDIA stock is trading at 29 times sales, suggesting that any misstep could send the stock tumbling. For investors who prefer steady, measured growth and dividends to sky-high valuations, OpenText stock offers a compelling case as a sleeper hit in the AI space.

OpenText stock may not headline the AI revolution, but it plays a critical supporting role in the information management sector. This Canadian company combines cloud, cybersecurity, and AI-powered analytics to serve enterprise-level clients. With its Aviator platform, OpenText stock is quietly embedding AI solutions into mission-critical business operations. This "quiet achiever" approach can be more appealing for long-term investors looking for exposure to AI without the headline-grabbing volatility of NVIDIA stock.

What investors gain

What makes OpenText stock particularly enticing now is its shareholder-friendly moves. Recently, the company increased its dividend by 5%, bringing the forward yield to 3.45%. It also launched a $300 million share-buyback program, signalling management's confidence in the company's undervalued status. These actions not only reward shareholders but also underscore OpenText's strong cash flow and financial discipline. Qualities NVIDIA stock's low dividend yield of just 0.03% lacks.

OpenText's financials may not have NVIDIA's fireworks, but these show a solid foundation. Its annual revenue reached $5.8 billion, with 79% of that coming from recurring streams. The company has also been actively optimizing its operations after the acquisition of Micro Focus. Cutting costs by $500 million and improving earnings before interest, taxes, depreciation, and amortization (EBITDA) margins. The result is a stock trading at a much more reasonable forward P/E ratio of 8.22, suggesting potential for upside as the company's efficiency and cloud revenue gains materialize.

Tech bets

While NVIDIA stock thrives on its GPUs, OpenText stock leverages AI through Aviator. This integrates into its enterprise-focused platforms like cybersecurity and supply chain management. The approach caters to massive enterprises that rely on structured and unstructured data for decision-making. Unlike NVIDIA stock's growth tied to the buzz of AI, OpenText stock's appeal lies in its role as an enabler of AI within industries that demand reliability and security — a less glamorous but equally important role.

Another area where OpenText shines is valuation. NVIDIA stock's market cap has soared to $3.33 trillion, pricing in years of perfection. OpenText stock, in contrast, trades at a modest $11.25 billion market cap with a price-to-book ratio of 1.95. Investors who missed NVIDIA stock's surge might find solace in OpenText's affordability and its steady, dividend-paying nature. This can buffer against market downturns.

OpenText also boasts a solid growth trajectory. The company is targeting 2-5% cloud revenue growth for fiscal 2024, with aspirations for 7-9% in subsequent years. It's banking on its AI capabilities, supported by strong enterprise relationships. Its emphasis on integrating AI into existing services rather than creating standalone solutions positions OpenText stock as a practical choice for businesses transitioning to more data-driven operations.

Bottom line

OpenText stock is built for the long haul. While NVIDIA stock dominates headlines, its high volatility can be daunting. OpenText's predictable revenue, focus on enterprise clients, and growing dividends make it a safer, more stable play for investors seeking exposure to AI without the speculative risks associated with NVIDIA stock.

In short, it's alright if you missed out on NVIDIA stock. OpenText stock offers a more grounded alternative for AI exposure, blending innovation with stability and shareholder returns. For those who believe in AI's transformative power but prefer a more measured investment approach, OpenText is a buy-and-hold stock that shouldn't be overlooked.