The Reddit trade is over. Retail investors who could have taken profits have. Others that are still holding – why sell now?
With this short-squeeze saga behind us, investors can now move on to assessing BlackBerry fundamentally. This TSX tech stock is one of the best in terms of its renewed growth potential. I think there are some newfound catalysts that have made this stock an investable one for the first time in a while.
Growth catalysts remain strong
I have to completely agree with fellow Fool contributor Andrew Button in a recent piece he wrote on BlackBerry.
Button wrote, “BlackBerry is a Canadian former smartphone company that has found new life as a developer of AI-powered car software. The company’s software revenue has been growing and has had many successes recently, including 175 millions of its QNX car software, A recent legal settlement with Facebook, and a highly publicized and potentially lucrative partnership with Amazon’s AWS.”
Indeed, BlackBerry’s transition from a hardware company to a pure-play software stock is complete. CEO John Chen’s vision for turning BlackBerry into a leading-edge provider of software solutions is becoming a reality. The company’s recent deal with Amazon has cemented this future.
Growth in autonomous driving, and therefore in the software that powers these vehicles, is likely to remain strong. I don’t see any scenario where this market shrinks in the foreseeable future. Accordingly, BlackBerry’s current positioning in terms of its business model is impeccable.
Investors will want to see results
Being positioned well and executing to perfection are two completely different things. To date, BlackBerry has little to show for its efforts. Yes, this is a turnaround play. Heck, this stock has been a turnaround play for years. Yes, there are incredible growth catalysts to speak of (finally). But whether Blackberry can show these results on its top and bottom lines each and every earnings report is another story entirely.
Right now, BlackBerry is a story stock with a ton of potential. I think the company’s management team has done a fantastic job of turning this massive ship around in the right direction. However, there’s a ton of work to be done, and many unknowns vis a vis how this company will perform over the long term.
Accordingly, investors considering the growth potential of this company should take a long-term approach to a stock like BlackBerry. This is not a stock to buy and hold for a few months. I think more volatility is likely on the horizon. However, those with a long-term growth mindset, and a robust risk tolerance, should consider this stock right now.