Technology-focused stocks are a pleasure to follow. The allure and surprise that they bring to the market are incredible, and as an investor, there’s nothing better than getting in on the ground floor by investing in an upcoming technological opportunity before it completely goes mainstream.
Here are two examples of well-known technology companies that are making strides in new fields that make them both promising options for long-term investors.
BlackBerry’s secure solution could be driving you soon
BlackBerry (TSX:BB)(NYSE:BB) surprised many of its long-standing critics this week, posting favourable results for the third fiscal of 2019. Among the highlights included in the announcement were a record non-GAAP total revenue of US$219 million from the software and services segment, reflecting a 10% increase over the same period last year. Incredibly, 88% of the revenue from that segment was recurring. BlackBerry also managed a free cash flow of US$39 million in the quarter and re-affirmed the previously stated outlook for the remainder of the fiscal.
Interestingly, the one area in which Blackberry’s quarterly update stood at zero was handset revenue. BlackBerry no longer makes handsets, but rather licenses its name for partner OEMs around the world to build and market the devices. Revenue for those devices is now reflected in licensing revenue.
But perhaps the most telling area that experienced growth that investors should be aware of is BlackBerry’s connected car business, which saw a 23% improvement year-over-year. BlackBerry’s autonomous driving solution runs off its secure QNX platform, which coincidentally is already installed into the infotainment systems of over 120 million vehicles worldwide. Leveraging that existing strength, BlackBerry has already forged partnerships with several auto manufacturers and suppliers around the world.
Why invest in BlackBerry? Blackberry’s autonomous solution is just half the reason investors should take notice. The other has to do with what BlackBerry has become synonymous of in recent years: security. Following a cybersecurity firm acquisition several years ago, Blackberry recently made its largest acquisition ever, a US$1.4 billion deal for Cylance – a U.S.-based firm known for leveraging AI to monitor and prevent cyber attacks.
The technology also dovetails nicely into BlackBerry’s connected car and, by extension, connected city visions. Self-driving vehicles will need to communicate with each other and with immobile infrastructure such as traffic signals securely. The fact that Blackberry is ahead of the game and taking this into consideration is intriguing and promising.
Sierra is prepping for the 5G revolution
Sierra Wireless (TSX:SW)(NASDAQ:SWIR) is another promising stock that should be on the radar of every tech-focused investor. The Internet of Things, or IoT as its commonly known, has grown exponentially in the past two years, with billions of devices around the world now connected and passing information between each other and to us. As a developer of wireless embedded modules and gateways that are necessary for those devices to connect to the internet. Those modules are already present in over 160 million devices across the world.
Yes, Sierra is in both an advantageous and desirable position, but that’s not even the best part.
Despite that potentially lucrative market, Sierra’s barely scratching the surface in terms of its full potential. That potential will be unlocked once the next generation of wireless communications is unlocked, which is commonly referred to as 5G. 5G brings with it the promise of increased connectivity speeds and options, which translate into greater capabilities for developers to place into their applications.
That increased connection speed also means a greater number of devices connected simultaneously and feeding information to each other and us at once. The sheer number of practical applications for this range from financial markets, asset tracking and healthcare to law enforcement, military, and automotive markets.
5G is actively being developed by Sierra and others is slated to begin appearing in new smartphones within the next few months.
Iain Butler has stumbled upon a little-owned stock he believes could be one of the greatest discoveries of his almost 20 years as a professional investor.
This is your chance to get in early on of what could prove to be a very special investment recommendation. Think about how many investing trends you've missed out on, even though you knew they were going to be big. Don't let that happen again.
Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. David Gardner owns shares of Sierra Wireless. The Motley Fool owns shares of BlackBerry and Sierra Wireless. BlackBerry is a recommendation of Stock Advisor Canada.