What happened?
BlackBerry (TSX:BB)(NYSE:BB) stock turned positive in the first week of July to start the month with a bang. The TSX-listed BB stock price rallied by 10.8% last week to settle at $7.69 per share, posting its biggest weekly gains since March. By comparison, the TSX Composite benchmark ended the highly volatile week with a minor 0.9% gain, as fears about a near-term recession continue to keep investors nervous.
So what?
Last week, BlackBerry revealed that the Volkswagen Group-owned automotive software company CARIAD has selected BB’s QNX operating system as one component for its software platform called VW.OS. Under this partnership, BlackBerry will license its QNX technology to enhance the advanced driver-assistance systems and automated driving functions on CARIAD’s VW.OS software platform. CARIAD is currently developing a unified software platform, which it expects to be available for Volkswagen Groups brands from the middle of the decade.
This news once again reflected BlackBerry’s consistently growing popularity as a prominent technological solutions provider for the automotive industry, boosting investors’ confidence and leading to a rally in BB stock.
This positive development came nearly a week after the Waterloo-based technology firm made its intelligent, data-driven asset monitoring solution for the transportation industry called BlackBerry Radar available on Amazon Web Services (AWS) marketplace. BlackBerry Radar’s availability on the AWS marketplace would allow transportation and logistics businesses to easily procure and deploy this monitoring solution across their entire fleet.
Now what?
Year to date, BlackBerry stock is still down by nearly 35%, as it has been falling for the last four quarters in a row. Last month, the Canadian software company released its May quarter financial results. During the quarter, its total revenue stood at US$168 million — higher than analysts’ expectations. Similarly, the company reported a much narrower-than-expected adjusted net loss of US$31 million for the May quarter. Despite its better-than-expected results, BB stock hasn’t seen much appreciation lately.
Overall, given its fast-growing footprint in the automotive sector and improving financial growth in recent quarters, I find BlackBerry stock highly undervalued at the moment.
