BusinessJun 25, 2026
BlackBerry: The Phone Company That May Have Pulled Off Tech's Smartest Pivot
Rhea Lobo
BlackBerry has a new calling. It now builds the software that keeps cars, robots, and medical devices running safely.
The company has spent years shedding its consumer identity and betting everything on two businesses: QNX, a real-time operating system embedded in safety-critical hardware, and Secure Communications, an encrypted messaging platform sold almost entirely to governments. Both are growing fast, and the market is only now catching on.
QNX is at the center of the investment case. The safety-certified operating system has powered mission-critical embedded systems for four decades and is used by automakers including BMW, Toyota, and Volkswagen among others.
Stifel argues there is no superior alternative to QNX's combination of safety certification and real-time performance at scale, reflecting decades of regulatory approvals that would be costly and time-consuming for competitors to replicate.
The royalty backlog reinforces the long-term story. QNX ended fiscal 2026 with roughly $950M in backlog, providing multi-year revenue visibility even if demand slows at an individual automaker.
Beyond automotive, factories, robotics, and healthcare already account for about 20% of QNX revenue, including a recent win supplying software for an AI-enabled heart pump developed by Johnson & Johnson. Stifel estimates the addressable market could eventually exceed BlackBerry's current QNX business by more than tenfold as physical AI adoption expands.
Outside QNX, BlackBerry's Secure Communications business provides another source of resilience. Governments view secure communications as mission-critical infrastructure, helping segment revenue grow 24% last quarter while adjusted EBITDA rose 55%.
Recent wins include Germany's Bundesbank, the US Internal Revenue Service, and a multi-year contract extension with Shared Services Canada running through 2033.
There are two genuine risks to the thesis. The first is timing. CFO Tim Foote said design wins often take years to progress from contract to production, so the value of today's backlog won't be reflected in revenue for some time. Investors are effectively paying today for royalty streams that are still years away.
The second risk is BlackBerry's heavy exposure to the automotive industry, where production remains volatile. While QNX's backlog has continued to grow despite the slowdown, a prolonged downturn would delay the conversion of design wins into royalty revenue. The company's expanding presence in China, including a recent QNX deployment across a luxury EV lineup, adds another layer of geopolitical risk.
"We believe these opportunities significantly enhance QNX's long-term potential."
John Giamatteo, BlackBerry CEO
The stock has nearly tripled year to date and jumped on its latest earnings beat, where revenue rose 26%.
Full-year guidance is now $594M to $621M. Stifel's $12 price target implies 36% upside from its initiation price, and six of seven analysts covering the stock carry a buy or strong buy rating.
BlackBerry hung up on phones. Wall Street may finally pick up.
