The shares of BlackBerry (TSX:BB)(NYSE:BB) have turned negative in the last couple of sessions after staging a sharp rally for several weeks. The stock has consistently been trading on a positive note since April. After posting 14% gains in May, it has risen by 36% in June so far. While the uncertainties about the sustainability of its recent massive price gains remain, I find BlackBerry stock worth buying for the long term.
BlackBerry stock and the Reddit trading mania
BlackBerry has seemingly been one of the most favourite stocks of the Reddit trading community in 2021. The stock started the year on a solid note with 113% gains in January, as it became one of the popular stocks among the members of the WallStreetBets Reddit group. The stock shed some of these gains later, as it lost nearly 70% in the next couple of months. Nonetheless, after its recent rally, BB stock is again trading with about 100% year-to-date gains.
Apart from the ongoing Reddit trading mania, the BlackBerry stock rally has a lot to do with the company’s improving future outlook, in my opinion. And many factors point towards it. Let’s take a look at some of them.
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Developing technology for futuristic vehicles
BlackBerry’s focus on developing advanced technological solutions for futuristic vehicles has increased in the last couple of years. According to the recent trend in the automotive industry, the demand for such technological solutions is likely to skyrocket in the coming years. These solutions would help make future electric and autonomous vehicles safer and smarter.
For example, BB is currently developing an integrated data platform for vehicles in partnership with Amazon Web Services, called BlackBerry IVY. This cloud-connected software platform would allow automakers to securely read vehicle sensor data in real time. Automakers can then process and utilize the sensor data with advanced technologies, including machine learning, to offer better features to customers. This is just a single example that shows how BlackBerry is making efforts to advance in the automotive technology field.
In its last earnings event, BlackBerry’s management called its progress related to the IVY platform development encouraging. The platform has already started attracting positive engagement from a number of leading automakers.
Eyes on the Chinese market
Moreover, BlackBerry is also making efforts to expand its presence in China — the world’s largest automotive market lately. The Canadian tech firm expanded its years-long partnership with the Chinese tech leader Baidu in January. After the partnership, Baidu’s high-definition maps will run on BB’s QNX Neutrino operating system to enhance the functionality of the upcoming mass-produced electric cars in the country. These cars will be produced by the Chinese mainstream automaker GAC Group.
Expertise in the cybersecurity field
BlackBerry is the world’s one of the top cybersecurity solutions providers. The demand for cybersecurity is on the rise as a large number of businesses are building their online presence in the post-pandemic world. That’s one of the reasons I expect BlackBerry’s enterprise security software business to exponentially grow in the coming years.
Overall, these factors could help BlackBerry to register robust financial growth in the coming years. That’s why you may want to buy its stock and hold it for the long term instead of making any short-term investment decision based on the ongoing Reddit trading mania.
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. The Motley Fool owns shares of and recommends Amazon and Baidu. The Motley Fool recommends BlackBerry and recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.