Why BlackBerry (TSX:BB) Stock Is Surging Today

Here’s why BlackBerry (TSX:BB)(NYSE:BB) stock is surging on Thursday, September 23.

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What happened?

The shares of Canadian tech firm BlackBerry (TSX:BB)(NYSE:BB) are on fire today. At the time of writing, BB stock was trading at US$10.33 per share with more than 8% gains in the U.S. premarket session Thursday morning. Its TSX-listed stock settled at $12.21 per share on Wednesday with about a 1.6% rise for the day and is likely to open sharply higher today.

The company’s better-than-expected second-quarter results are mainly driving its stock higher today. Let’s take a closer look.

So what?

BlackBerry is a Waterloo-based enterprise software firm with a market cap of around $6.9 billion. The company announced its results for the second quarter of the fiscal year 2022 yesterday after the market close. In the August quarter, its revenue fell by 34.2% YoY (year over year) to US$175 million. Nonetheless, it was better than Street analysts’ expectation of $163.5 million.

Stronger sequential billings in BlackBerry’s cybersecurity business segment drove its revenue higher. Similarly, its internet of things (IoT) segment performance was also better than expected due to strength in the design activities area. However, BB’s ongoing patent sale negotiations-related restrictions continued to affect its licensing segment revenue, as the company warned earlier this year.

As a result, BlackBerry reported an adjusted net loss of US$0.06 per share — still 14% better than Street’s estimates.

Now what?

BlackBerry stock has been highly volatile in 2021 so far due to its popularity among Reddit traders. As of yesterday’s closing, its shares were up 45% year to date but were trading with 15% losses in September. Its better-than-expected latest quarterly results are likely to help the company regain investors’ confidence and drive its stock up.

The ongoing chip shortages are hurting the entire automotive industry right now, leading to low demand for BB’s automotive segment offerings. Nonetheless, its consistent focus on developing advanced technologies for smart mobility could help it benefit from the upcoming mobility revolution. Also, the rising demand for its cybersecurity solutions looks promising. That’s why Motley Fool investors may want to add BB stock to their portfolios for the long term now before it’s too late.

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.

The Motley Fool recommends BlackBerry. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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