Apple Stock vs. BlackBerry Stock: Better Buy Today

Apple (NASDAQ:AAPL) released its record Q1 earnings on Wednesday. But is its stock a better buy than the Canadian tech company BlackBerry (TSX:BB)(NYSE:BB)? Let’s discuss.

| More on:

Image source: Getty Images

Apple (NASDAQ:AAPL) — the world’s largest tech company — released its first-quarter fiscal 2021 results on Wednesday. The company’s revenue rose to US$111.4 billion during the quarter from US$91.8 a year ago. As a result, its adjusted net profits jumped 29.3% on a YoY (year-over-year) basis to a record $28.8 billion. It translated into a solid 25.8% adjusted net profit margin for the American tech giant.

Apple’s latest earnings

The company’s products segment sales saw a 21% rise, while its services segment revenue soared by 24% YoY in the last quarter. A few years ago, Apple’s remarkable success story attracted the legendary investor Warren Buffett’s attention. While Berkshire Hathaway — Buffett’s investment firm — has recently reduced its stake in the tech giant, it still owns about 964.7 million Apple shares.

In the last couple of years, many reports have suggested that Apple is secretly working on its electric car project. The rising electric vehicle demand and Elon Musk’s electric carmaker Tesla’s recent success have attracted many businesses who want to benefit from it.

However, Apple is not alone in this race. Many other small and big companies are openly making more efforts than Apple to benefit from the growing electric vehicle (EV) and smart mobility market. Let’s take a closer look at why BlackBerry (TSX:BB)(NYSE:BB) — Apple’s old rival — is trying to remain at the forefront of the EV and smart mobility revolution.

Here’s where BlackBerry is winning

BlackBerry was ruling the smartphone market roughly about 15 years ago, while it’s not in the game anymore. Apple’s iPhone launch played a key role in killing BlackBerry’s smartphone market dominance.

BlackBerry is an enterprise security software and services company today. The company now makes most of its revenue from the Internet of Things segment. It accounted for more than half of its revenue in fiscal 2020. Geographically, North America is BlackBerry’s single largest market.

The Waterloo-based tech firm’s QNX real-time operating system is widely used by some of the largest auto companies like Honda, BMW, General Motors, Ford, Jaguar Land Rover, and Hyundai, etc. BB is now working on an integrated data platform in collaboration with Amazon Web Services. It would allow automakers to access vehicle sensor data and use it for cloud and in-vehicle applications. The platform would also have some EV specific features in the future.

As BlackBerry already has big automakers in its client list, it won’t take much effort and much incremental marketing costs to market its new data platform to big automakers.

Footprints in the Chinese EV market

China is the world’s largest electric vehicle market. BlackBerry earlier this week expanded its partnership with the Chinese search engine giant Baidu.

Baidu will allow BlackBerry to use its HD maps in BB’s QNX Neutrino OS. This OS would be used in the Chinese auto giant GAC Group’s mass-produced EVs. This move could help BlackBerry increase its presence in China and lead to big financial gains in the medium term.

Foolish takeaway

I admire Apple for its ability to consistently posting record profits and staying ahead of the competition in most areas. However, BlackBerry’s early moves to gain from the rapidly growing EV and autonomous vehicle market could help it become a bigger player in these segments than Apple. I believe that’s what makes BlackBerry stock a better buy than Apple — at least for the medium to long term.

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. David Gardner owns shares of Amazon, Apple, Baidu, Ford, and Tesla. Tom Gardner owns shares of Baidu and Tesla. The Motley Fool owns shares of and recommends Amazon, Apple, Baidu, Berkshire Hathaway (B shares), and Tesla. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, and long January 2023 $200 calls on Berkshire Hathaway (B shares). Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Tech Stocks