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.

More on Investing

man shops at grocery store
Dividend Stocks

Choice Properties Pays Monthly: Does the Yield Compensate for Higher Rates?

Choice’s yield deserves a closer look at cash after property spending and financing costs.

Read more »

Natural gas
Energy Stocks

A Perfect TFSA Stock: A 6.5% Payout Each Month

Peyto Exploration and Development is growing its dividend as natural gas fundamentals continue to improve.

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

Best Monthly Dividend Stocks on the TSX? My Top Picks for Today

Looking for monthly dividend income and an attractive growth profile? These two TSX stocks are my top picks today.

Read more »

A meter measures energy use.
Energy Stocks

Canadian Utilities vs. Hydro One: Which Dividend Stock Would I Hold for 15 Years?

A proposed merger changes the Canadian Utilities comparison, while Hydro One still requires price discipline.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 12

Rising natural gas prices could help TSX energy stocks extend their gains today, while falling oil, gold, and silver prices…

Read more »

pig shows concept of sustainable investing
Stocks for Beginners

How I’d Turn Quarterly Bank Dividends Into a Monthly Paycheque

Quarterly bank dividends can fund regular monthly transfers without choosing stocks for payment dates.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Energy Stocks

Retirees: How to Use Your TFSA to Earn an Average of $386 in Monthly Tax-Free Income

This TFSA strategy can help boost average returns while reducing risk.

Read more »

oil pumps at sunset
Dividend Stocks

Canadian Natural Resources vs. Suncor: The Dividend Stock to Own Through 2026

Let’s compare Canadian Natural Resources and Suncor Energy across their financial performance, dividend track records, growth prospects, and valuations to…

Read more »