Tech Investors: Ride the Wave of BlackBerry Ltd.’s Deal With Baidu Inc. (ADR)

The most recent deal announced by BlackBerry Ltd. (TSX:BB)(NYSE:BBRY) in which the company will be partnering with massive Chinese firm Baidu Inc. (NASDAQ:BIDU) has deservedly resulted in a significant amount of positive forward momentum for the company.

| More on:
The Motley Fool

Looking back at 2017, tech investors will be very pleased with their investment in BlackBerry Ltd. (TSX:BB)(NYSE:BBRY). Shares of the Canadian technology company ended the year more than 55% higher on strength related to the ability of the company to turn a profit and expectations that BlackBerry’s autonomous vehicle software platform will take off in 2018.

It appears 2018 will not be outdone, however, with shares of BlackBerry trading more than 18% higher in its first two trading days after announcing the company had signed a deal with Chinese firm Baidu Inc. (ADR) (NASDAQ:BIDU) to develop self-driving technology built on top of BlackBerry’s QNX Hypervisor 2.0 software platform.

The deal is expected to result in a continued boon for BlackBerry, providing additional forward momentum for the company’s software division, which had a very positive 2017. The new Baidu partnership follows announcements of a partnership with Qualcomm Inc., Denso, and Aptiv PLC. In BlackBerry’s case, the ability of the newly structured software company to continue to innovate and improve its software platform for the autonomous vehicle market while partnering with key players will be paramount for this year.

It certainly looks like the company has started the year off on the right foot.

With BlackBerry’s stock price climbing so sharply in such a short amount of time, investors will now be looking forward to how these partnerships are monetized by BlackBerry’s management team. As I’ve discussed in the past, I have generally been impressed with BlackBerry’s ability to turn a profit so quickly, while pivoting the company nearly 180 degrees in a short amount of time; much of the praise for such a revival should certainly be directed at CEO John Chen.

With investors forced to wait another three months to see any sort of financial results/impacts of the work BlackBerry has already begun at the beginning of this year, I expect the next two months to see trading volatility, as investors attempt to price the value of these partnerships into BlackBerry’s stock price.

Bottom line

BlackBerry is a company with tonnes of forward momentum, starting 2018 as a top performer already. For momentum investors, now may be a good time to buy the news and get in while the going is good. Who knows? Maybe Citron’s bet that BlackBerry would hit US$20 in the next 24 months will pan out sooner than expected.

While risks still abound with respect to the long-term ability of BlackBerry to keep pace with other innovators in the global technology space, I view these recent partnerships BlackBerry has announced as a step in the right direction.

Stay Foolish, my friends.

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.

Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. David Gardner owns shares of Baidu. Tom Gardner owns shares of Baidu and Qualcomm. The Motley Fool owns shares of Baidu, BlackBerry, and Qualcomm. BlackBerry and Baidu are recommendations of Stock Advisor Canada.

More on Tech Stocks

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

money goes up and down in balance
Tech Stocks

1 “Magnificent 7” Stock I’d Buy Over Nvidia Right Now

Here's why Meta Platforms stock is a better choice for Canadian investors compared to Nvidia in November 2024.

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

OpenText stock has fallen in the last few years, but that could mean this top tech stock remains an undervalued…

Read more »

AI microchip
Tech Stocks

Celestica Stock: Buy, Sell, or Hold?

Celestica's stock price has rallied 950% in the last five years. Will the AI boom send it even higher in…

Read more »

data analyze research
Tech Stocks

2 Ridiculously Cheap Growth Stocks to Buy Hand Over Fist in 2024

Well Health Technologies is a cheap growth stock to buy for its record-breaking results, massive revenue growth, and profitability.

Read more »