Why BlackBerry (TSX:BB) Surged 20% Yesterday

Blackberry Ltd. (TSX:BB)(NYSE:BB) stock jumped on news of a small patent sale this week. I’m very bullish on the stock to start 2021.

BlackBerry (TSX: BB)(NYSE: BB) stock rose 21% on January 14. This top technology stock has had some violent swings since the beginning of December. It started with a massive surge on December 1, when BlackBerry announced its collaboration with Amazon in the automotive software space. Today, I want to discuss what sparked its surge this week.

BlackBerry spikes after selling patents

Records from the United States Patent and Trademark Office show that BlackBerry assigned ownership of 90 patents to the Chinese telecommunications giant Huawei on December 23. This represents a fraction of the over 38,000 patents that BlackBerry possesses. However, it does include some major advances dating back to when BlackBerry was a powerhouse in the hardware space. Huawei has ambitions of its own in the handhelds market, which explains this ambitious move.

Some Canadian telecoms have come under fire for working with Huawei to develop Canada’s 5G network. Critics have raised questions after this deal, but the move makes sense on BlackBerry’s end. It still boasts a massive trove of patents and it has moved away from the hardware space to a focus on software. BlackBerry’s own spokesperson called the transaction “very small” and “not part of an ongoing arrangement.”

BlackBerry remains one of the largest patent holders in the world. It was the only Canadian company on the IFI Claims Patent Services’ annual list of the 250 biggest patent owners in the world – ranking 55th.

Why you should continue to hold this tech stock in 2021

When this week started, I’d recommended that investors jump on Blackberry stock as soon as possible. Its shares have already climbed 35% to kick off the New Year. The stock is up 71% over the past three months.

One of the most exciting developments is BlackBerry’s foray into automotive vehicle software with Amazon as a collaborator. The new cloud software knowns as IVY allows automakers to read vehicle sensor data to improve systems and performance.

This could be a revolutionary leap forward in the world of vehicle tech, akin to the leaps made with iOS and Android on handheld devices. BlackBerry’s QNX software is already embedded in over 175 million vehicles around the world. IVY technology is expected to be embedded in automobiles by 2023.

BlackBerry continues to be a big player in the cyber security space. Its acquisition of Cylance has paid off in recent quarters. The previous year saw an increasing number of data breaches in the private and public sphere, and costs are mounting. BlackBerry boasts a promising footprint in two fertile markets that are positioned for big growth in the 2020s and beyond.

Shares of BlackBerry last closed at $11.46 a share. The company has made promising moves in recent years and continues to benefit from the stellar leadership of John Chen. There is a good chance the stock will have a coming out party in 2021, which could richly reward shareholders.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Ambrose O'Callaghan 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.

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