Blackberry managed to build a real business out of its memestock boom
The former memestock BlackBerry surged on blowout earnings this week — the bull case has nothing to do with phones.
Q1 Revenue: $152.9 million, up 26% from a year ago
EPS beat: 44%, fourth time in five quarters that BlackBerry posted a net profit
Shares of the stock are up nearly 180 percent over the past year.
Cars on QNX: 275 million, nearly every maker except Tesla
When you think of Blackberry, you probably picture the clunky QWERTY keyboard and yearn for the pre-AI slop era. But for many traders, that nostalgic memory could have been getting in the way of evaluating a rising star.
In its first quarter earnings on Thursday, the cell-phone-turned-B2B-enterprise-software-company blew past estimates with revenue up 26% and a 44% EPS beat after back-to-back 30%+ beats before that. The company hiked its full-year profit forecast to 16 cents to 20 cents per share with revenue between $594 million and $621 million.
“The market still misdefines BlackBerry,” analyst Suthan Sukumar of Stifel said Tuesday in a note to clients. “This is…a mission-critical software layer in the physical AI stack and a dominant partner to silicon leaders like NVIDIA, Qualcomm, and AMD powering the build-out from cloud to edge, across cars, robots, factories, and medical devices.”
QNX, BlackBerry’s real-time operating system — runs inside of 275 million cars worldwide. “There's more software going into a car these days than ever before, CEO John Giamatteo told Bloomberg on Friday. “That's really where we shine as a company.”
Modern autos generate terabytes of daily data, from tire pressure to monitoring driving behavior, and QNX is the foundation beneath all of it. The system is safety-certified, that’s engineer talk for does what it's told, every time, whereas AI systems make predictions based on probabilities.
“As intelligent machines become increasingly autonomous and operate around people, the requirements for safety, security, reliability, and real-time determinism become even more important,” said Giamatteo on Thursday’s earnings call. “Unlike probabilistic AI systems, QNX technology is deterministic and safety-certified, which is exactly why it is so hard to replicate and why customers trust it for systems where failure is not an option.”
About 20% of QNX revenue now comes from non-car segments. Use in robotics, medical devices, drones, and industrial automation are growing. In June, NVIDIA announced Halos for Robotics and QNX is in the stack. Per QNX’s own research, 85% of robotics engineers expect software’s role in their field to increase over the next three to five years.
Similarly, analysts say the global military drone sector is expected to surpass $25 billion in 2026 and more than double by 2032. QNX is already deployed in unmanned aerial systems as well as used in military-grade encrypted communications.
What does the Street think now?
Raised from $4.75 to $9.50 at Raymond James
Raised from $10 to $13 at CIBC
Coverage initiated with Buy at $12 at Stifel
On Friday, when Bloomberg asked if consumers could swap out iPhones for the nostalgic keyboard again, Giamatteo said “I don't think you'll see us get back into the phone game anytime soon.”
BlackBerry shed its consumer identity years ago. What’s left is a profitable B2B software company that’s already embedded in tech infrastructure from cars to robots to drones. As physical AI scales, the demand for trusted safety-certified software is likely to grow.
