Why BlackBerry Stock Has Risen 20% in Q3 So Far

Despite its recent recovery, BlackBerry stock continues to trade with 30% year-to-date losses.

| More on:
Business man on stock market financial trade indicator background.

Image source: Getty Images

What happened?

Shares of BlackBerry (TSX:BB)(NYSE:BB) are continuing to outperform most of its peers and the broader market this quarter. BB stock has recovered by about 20% in the third quarter (Q3) so far to $8.30 per share after losing about 14% of its value in the previous quarter. By comparison, the TSX Composite Index has seen 6.6% gains in Q3.

So what?

BlackBerry has been one of my favourite Canadian tech stocks in recent years, as it hasn’t seen much appreciation, despite its consistently improving long-term fundamental outlook. In the last couple of years, the demand for its enterprise cybersecurity solutions has risen sharply after the global pandemic-related restrictions accelerated the shift to digital commerce and encouraged remote work culture. In addition, the company has also been striving to develop advanced machine learning and artificial intelligence-based technological solutions for the automotive industry.

Earlier this month, BlackBerry revealed that China’s Hozon New Energy Automobile’s NETA Auto “has selected BlackBerry QNX technology to power its soon-to-be-produced futuristic sports sedan, the NETA S.” This development seemingly boosted investors’ confidence as the company’s expansion in the world’s largest auto market continues, triggering a healthy recovery in BB stock in the ongoing quarter.

BlackBerry’s better-than-expected May quarter results, released on June 23, could also be responsible for its third-quarter gains on Bay Street. During the quarter, its cybersecurity segment revenue rose 6% year over year, while its internet of things (IoT) segment posted a solid 19% jump in sales, exceeding analysts’ estimates.

Now what?

Despite its 20% recovery in the ongoing quarter, BB stock still trades with nearly 30% year-to-date losses. With this, the stock has erased all its gains seen in the last couple of years, despite its consistently improving fundamental outlook. Given that, I find BlackBerry stock way too undervalued, despite its recent rally, making it one of the best tech stocks to consider buying right now for the 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.

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

More on Tech Stocks

consider the options
Tech Stocks

Top 2 Beaten-Down Stocks I’ve Not Given Up on

The massive correction in the prices of these TSX stocks presents a solid buying opportunity at current levels.

Read more »

Various Canadian dollars in gray pants pocket
Tech Stocks

2 Cheap Stocks (Below $50) to Buy and Hold Till 2032

The inexpensive valuations and rapid growth will help these Canadian companies outperform the TSX by a wide margin.

Read more »

Couple relaxing on a beach in front of a sunset
Dividend Stocks

Canadians: 3 Easy Stocks to Invest in for Retirement

It’s never too early to begin retirement planning. Adding the right mix of stocks to an RRSP can grow your…

Read more »

TIMER SAYING TIME FOR ACTION
Tech Stocks

3 Growth Stocks to Buy Before it’s Too Late

These growth stocks were once greats, and now they're gross to even consider. But honestly, I'm asking you to consider…

Read more »

Family relationship with bond and care
Tech Stocks

Retire Young: 2 Cheap Growth Stocks to Buy Now and Hold Forever

There are huge sales on growth stocks in the tech sector. Here are two top picks to put on your…

Read more »

A worker uses the cloud for paperless work. tech
Tech Stocks

3 Tricks to Finding Undervalued Canadian Stocks

There are plenty of cheap Canadian stocks, but not all are undervalued. Yet this one certainly ticks all the boxes.

Read more »

Tech Stocks

Lightspeed Stock: Could a Holiday Rush Save the Tech Stock?

Lightspeed (TSX:LSPD)(NYSE:LSPD) stock continues to have near-term issues, but in the long term, this could be a stock everyone wants…

Read more »

question marks written reminders tickets
Tech Stocks

Is Evertz Technologies (TSX:ET) Stock a Buy After Q1 Earnings?

Evertz Technologies (TSX:ET) stock appears undervalued and offers a high dividend yield and growth potential. Watch identified challenges.

Read more »