3 Reasons Why Investors Should Buy BlackBerry Stock Before it Soars in 2021

Growth in the tech sector is huge right now, and BlackBerry is an undervalued name every growth investor should check out!

| More on:
analyze data

Image source: Getty Images

Turnaround plays are all the rage these days. Picking up stocks that have tanked because of the coronavirus pandemic and riding the wave higher has turned out well for many investors.

The reality is, Canadian software company BlackBerry (TSX:BB)(NYSE:BB) has not performed as well as other rebound plays of late. Despite more than doubling from its 52-week low, shares of BlackBerry have lost more than one-quarter of their value since the beginning of December. However, I’m going to discuss why investors shouldn’t be concerned with the near-term performance of this stock. Rather, I suggest investors focus on these three long-term catalysts that should take this stock higher.

Amazon deal still a go

The multi-year deal BlackBerry inked with technology mega cap giant Amazon.com (NASDAQ:AMZN) in December is still on. This deal is massive for BlackBerry shareholders and could inspire a wave of new investment in 2021.

The deal allows Amazon to access BlackBerry’s IVY platform, providing improved data collection for all the information gathered by vehicle sensors. This platform is built with BlackBerry’s QNX platform fully integrated, allowing BlackBerry to offer a suite of software solutions to companies like Amazon. This could mean future partnerships may be on the horizon for BlackBerry. Should such partnerships materialize, we could see another spike in this company’s stock price.

Safety and cybersecurity are going to be more important than ever

BlackBerry’s track record as a company with a laser-like focus on cybersecurity is going to be key for this stock’s success long term. The company’s QNX platform, as well as its IVY platform, will propel this company forward over time. John Chen, BlackBerry’s CEO, has completely shifted the company’s strategic direction toward software solutions focused on cybersecurity. I see this secular growth trend as the key investment thesis for this stock as a long-term growth play.

Secular trends pandemic resistant

The trends supporting the company’s software platforms are relatively immune to the effects of the coronavirus pandemic. Near-term headwinds related to the pandemic were tied to expectations of a slowdown in automobile production. Additionally, a slower-than-expected adoption of BlackBerry’s software by automakers has soured sentiment for this company somewhat.

That said, markets have since shifted overall sentiment to a much more optimistic and bullish stance. I expect continued growth in the EV segment and this partnership with Amazon to drive BlackBerry’s share price higher. Growth investors ought to take notice. Picking up shares on dips like the one we saw these past few weeks is a great idea.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.

More on Tech Stocks

woman retiree on computer
Tech Stocks

2 Top TSX Growth Stocks to Buy Today and Hold for 10 Years

Given their long-term growth prospects and discounted valuations, these two growth stocks could deliver multi-fold returns in the long run.

Read more »

hot air balloon in a blue sky
Dividend Stocks

3 Roaring Stocks to Hold for the Next 20 Years

Sure, there are stocks roaring upwards in the last year, but these three can claim doing it for decades.

Read more »

A chip in a circuit board says "AI"
Tech Stocks

How to Invest in C3.ai Stock in Canada

Are you looking for growth from our neighbours to the south? This tech stock has it, but how can Canadians…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

Better Buy in July: Passive-Income Plays or Growth Stocks?

Will July mark the beginning of an economic recovery? Should you consider investing in passive income or growth stocks ahead…

Read more »

A chip in a circuit board says "AI"
Tech Stocks

This is the Best AI Stock to Buy Right Now

When it comes to AI stocks, Nvidia stock should jump to mind. But don't forget about the absolute dominance of…

Read more »

Choose a path
Tech Stocks

BB Stock’s Dismal Earnings: I’ll Stay Away

BlackBerry Inc (TSX:BB) stock crashed after earnings. Here's why I'm still staying away.

Read more »

sad concerned deep in thought
Tech Stocks

Is the Worst Over for BlackBerry Stock?

BlackBerry stock has been burning investors' money for the last four years. Is the worst over for this stock? Here…

Read more »

Person uses a tablet in a blurred warehouse as background
Tech Stocks

1 Super Tech Stock (Besides NVIDIA) to Buy Hand Over Fist in 2024

A TSX super tech stock could deliver comparable or far better returns than the AI king across the border.

Read more »