BlackBerry (TSX: BB) finally delivered the sort of rally long-term shareholders once had to squint at old charts to remember.
BlackBerry stock climbed more than 150% from its 52-week low at points during 2026, even after its recent pullback. Investors are no longer pricing BlackBerry stock as a permanently stalled turnaround. They’re increasingly treating it as an artificial-intelligence (AI) and embedded-software growth story.
The business earned some of that renewed enthusiasm. Revenue is growing, profitability has improved, and QNX is finding opportunities beyond vehicles. Still, a better business can become an expensive stock surprisingly quickly.
Before buying, I’d check one number above all others: operating cash flow.
Source: Getty Images
The number is US$100 million
BlackBerry expects to generate approximately US$100 million in operating cash flow during fiscal 2027. The company has spent years presenting investors with promising technology that didn’t consistently turn into cash.
The latest quarter showed real progress. First-quarter revenue increased 26% year over year to US$152.9 million. QNX revenue climbed approximately 26% to US$72.3 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 144% to US$36.3 million.
BlackBerry also produced US$4.6 million of operating cash flow. Excluding the fiscal 2024 patent sale, that represented its first cash-positive fiscal first quarter in nine years. That’s encouraging. However, US$4.6 million is still a small first step toward US$100 million.
Cash flow
QNX provides foundational operating software for vehicles, robotics, medical devices, industrial equipment, and other systems that can’t afford to freeze halfway through a job. Its software is already installed in more than 275 million vehicles. As automobiles require more code for digital cockpits, advanced driver-assistance systems, connectivity, and centralized computing, BlackBerry may earn more software revenue per vehicle.
Yet design wins don’t immediately become revenue. A customer may select QNX years before the corresponding vehicle or machine enters production. The royalty backlog, therefore, needs to convert into sales, and those sales ultimately need to produce cash.
That distinction is important when researching Canadian AI stocks. AI exposure can make a presentation exciting. Cash flow determines whether shareholders eventually benefit from it.
Valuation demands delivery
BlackBerry stock recently traded near $10.68, giving the company a market capitalization of approximately $6.3 billion. That remains far below the stock’s 2026 high, but considerably above the $4.35 low that helped create the eye-catching rally.
A recent analyst estimate placed BlackBerry’s fair value at $7.40 per share. Fair-value estimates are opinions rather than finish lines, but that figure suggests investors are already paying for meaningful improvement.
BlackBerry stock also trades near 40 times estimated forward earnings. That multiple can work if QNX sustains strong growth, margins expand, and operating cash flow approaches management’s target. It becomes much harder to defend if the US$100 million forecast slips into the following year.
What would make me buy?
I’d want second-quarter results to show continued QNX growth and operating cash flow moving clearly toward the full-year target. Management’s second-quarter forecast calls for between break-even and US$10 million of operating cash flow, so the larger contribution may arrive later in the year.
That timing doesn’t automatically undermine the thesis. It does leave little room for another delay. Investors learning how to choose growth stocks should also distinguish between a starter position and a full commitment. BlackBerry stock’s technology opportunity is credible, but its valuation and history make gradual buying more sensible than chasing the rally.
Bottom line
BlackBerry stock looks better than it did when the stock sat near its yearly low. QNX is growing, profitability has improved, and physical AI gives the company a compelling new narrative.
Now that narrative must produce cash. The US$100 million operating cash flow target is the number I’d watch through the remaining fiscal 2027 results. If BlackBerry stock reaches it while maintaining QNX growth, today’s valuation may become easier to justify. If cash flow falls short, investors may discover that a 150% rally priced in the turnaround while the turnaround was still in progress.
