BlackBerry Stock (NYSE:BB): Compelling after Surprise Profit and AMD Collaboration
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BlackBerry Stock (NYSE:BB): Compelling after Surprise Profit and AMD Collaboration

Story Highlights

BlackBerry went from a tech hardware contender to a laughingstock, but now, the company is reinventing itself and impressing investors. Besides, BlackBerry’s partnership with a famous chipmaker could add rocket fuel to BB stock.

This tech-stock idea may come as as surprise, but it’s actually quite compelling after we consider the latest news and data. BlackBerry (NYSE:BB) probably isn’t your first choice for technology exposure, but keep an open mind. I am bullish on BB stock, and even after today’s share-price rally, I’m preparing for more gains.

BB stock gained 7.6% today.

BlackBerry was, for many years, known as a leader in tech hardware. More specifically, the company made mobile phones with little keyboards. I still have memories of former President Barack Obama proudly displaying his BlackBerry phone.

However, after smartphones made BlackBerry’s phones seem obsolete, BB stock dropped like a rock, and BlackBerry basically became a punch line on Wall Street. Don’t count the company out, though, as BlackBerry’s tie-in with a well-known processor producer is now the talk of the town.

BlackBerry to Work with AMD on Robotics Research

It’s a rare occasion when BlackBerry is on the front page of the financial news. Yet, BB stock is moving higher and BlackBerry’s new team-up for robotics research is top-of-mind for today’s traders.

Here’s the scoop. BlackBerry just disclosed a collaboration with Advanced Micro Devices (NASDAQ:AMD) to revolutionize robotic systems. To this collaboration, BlackBerry will bring its QNX Software Development Platform, while AMD will provide its Kria series hardware solutions.

Clearly, BlackBerry has come a long way since its days as a mobile phone manufacturer. In recent years, the company has reinvented itself as a provider of cybersecurity solutions. Consequently, you might not have expected AMD to choose BlackBerry for robotics software.

Yet, here we are, and unexpected things are happening, but it’s a net positive for BlackBerry. Through this partnership, BlackBerry’s QNX software products and AMD’s Kria KR260 starter kit will hopefully combine to deliver “enhanced performance, reliability, and scalability for robotic systems in industrial and healthcare.”

AMD isn’t part of the Magnificent Seven, but it might as well be a member. As AMD partners with BlackBerry, this really is a vote of confidence in the once-mocked Canadian phone maker.

Plus, there are broader implications of this partnership. To quote Grant Courville, VP Product & Strategy at BlackBerry QNX, this collaboration has the potential to “transform the future of the robotics industry.” Personally, I hope that the new robotics technology can help save lives in a medical/surgical context.

Of course, the market is more concerned about the profit potential than the lifesaving prospects. In any case, BB stock is rising today, and there’s plenty of overhead room, as the stock is still far below its 2021 peak of more than $14.

BlackBerry Drives Toward Profitability

Certainly, it will take more than a tie-in with Advanced Micro Devices to put BlackBerry back on track to consistent profitability. It will be a process, not a single event, but BlackBerry appears to be on the right track.

As evidence of this progress, BlackBerry posted a surprise profit for the fourth quarter of Fiscal Year 2024. Analysts expected the company to have lost 3 cents per share for the quarter, but BlackBerry actually reported EPS of $0.03.

Not only that, but BlackBerry’s Fiscal Q4-2024 revenue of $173 million easily beat the consensus estimate of $154.78 million. Notably, BlackBerry’s Cybersecurity division revenue of $92 million marked a 5% year-over-year increase. That’s not a gigantic gain, but at least BlackBerry appears to be demonstrating slow but steady growth as a cybersecurity service company.

This might be the best part, though. BlackBerry’s cash used by operations declined 52% sequentially to $15 million, indicating that the company is spending less. With that in mind, BlackBerry’s press release emphasized that the company significantly improved its operating cash usage sequentially and “expects to be cashflow and adjusted EBITDA positive for FY25.”

What about the current quarter, though? BlackBerry’s management expects the company to generate revenue of $130 million to $138 million, which would be lower than BlackBerry’s Q4-FY2024 revenue of $173 million. Also, the company anticipates a current-quarter non-GAAP basic net loss of $0.04 to $0.06 per share.

That’s not extremely optimistic, but evidently, the market is willing to forgive BlackBerry for being honest in its predictions. If the company can meet or exceed its expectations for the current quarter, then BlackBerry might deliver a positive surprise in a few months.

Is BlackBerry Stock a Buy, According to Analysts?

On TipRanks, BB comes in as a Hold based on four unanimous Hold ratings assigned by analysts in the past three months. The average BB stock price target is $2.99, implying 3.4% downside potential.

Conclusion: Should You Consider BlackBerry Stock?

BlackBerry is working hard to shake off its previous image as a maker of now-obsolete phones with miniature keyboards. Getting together with a heavily favored chipmaker like Advanced Micro Devices should help get BlackBerry’s reputation and finances back on the pathway to success.

Besides, BlackBerry’s surprise quarterly profit indicated that the company is making headway as a cybersecurity software contender. Hence, when all is said and done, I like BlackBerry’s growth prospects and am definitely considering a share position in BB stock.



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