Can BlackBerry's QNX and Secure Comms Growth Drive Further Gains?

BlackBerry Limited’s BB momentum has been supported by strong execution across its QNX and Secure Communications businesses. QNX continued to benefit from long-term trends, including software-defined vehicles, centralized computing, the broader embedded market and Physical AI.The business reported…

BlackBerry Limited’s BB momentum has been supported by strong execution across its QNX and Secure Communications businesses. QNX continued to benefit from long-term trends, including software-defined vehicles, centralized computing, the broader embedded market and Physical AI.

The business reported strength across development licenses, professional services and royalties. Development license revenue reached its highest level in eight quarters, reflecting customer investment in new software platforms built on the latest SDP 8 technology. The company also secured new design wins across automotive and General Embedded Markets (GEM), including advanced driver assistance systems, driver monitoring solutions, commercial vehicles and medical diagnostics, while expanding adoption of its SDP 8 platform.

BlackBerry also highlighted several long-term growth drivers for QNX. GEM remains the company's fastest-growing segment, extending opportunities beyond automotive into robotics, industrial automation, medical devices and other safety-critical applications. The company believes Physical AI will continue to increase demand for technologies that offer safety certification, reliability and real-time determinism.

BlackBerry also continues to make progress with Alloy Kore, which is expected to expand its role from an operating system provider to a platform provider, increasing software content per vehicle and supporting future backlog growth. Partnerships with NVIDIA Corporation NVDA, Qualcomm, Arm and other silicon ecosystem leaders continue to strengthen its position across next-generation intelligent systems.

Secure Communications also performed well in first-quarter fiscal 2027, supported by stabilizing fundamentals, improving customer retention and increasing government demand. Revenue exceeded guidance, while annual recurring revenue grew year over year. Growth benefited from the expansion and multiyear extension of its agreement with Shared Services Canada, which increased deployment of Secusmart's encrypted voice, data and video solutions.

The company also secured renewals, expansions and new customer wins across government, defense and regulated industries in North America and Europe. BlackBerry stated that demand remains healthy across both QNX and Secure Communications, supported by a growing pipeline, expanding backlog and continued customer engagement.

Taking a Look at BB’s Competitors

CrowdStrike CRWD remains well-positioned to benefit from sustained cybersecurity demand as customers consolidate tools on the Falcon platform and expand module adoption through subscriptions and Falcon Flex. AI-led launches, including agent-based workflows, broader data and browser protection, and deeper partnerships across the cloud ecosystem, support cross-sell and renewals over time. Recent acquisitions in identity and browser runtime security extend the platform’s addressable use cases, while the company’s liquidity and cash generation provide the flexibility to keep investing. The company also raised its fiscal 2027 net new ARR growth guidance by 520 basis points at the midpoint and updated its full-year guidance to include total revenues of $5.91-$5.95 billion and ARR of $6.53-$6.55 billion.

Palo Alto Networks PANW continues to benefit from higher cybersecurity priority as enterprises deploy AI and look to consolidate vendors onto fewer platforms. Platformization is translating into larger commitments, supported by expanding next-generation security ARR and RPO, and management guidance implies continued growth in the fourth quarter of fiscal 2026. Momentum in Network Security, SASE and Prisma AIRS, along with early execution on the CyberArk and Chronosphere integrations, supports the long-term revenue mix shift toward recurring software and free cash flow. For fiscal 2026, Palo Alto Networks now expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%.

BB Price Performance, Valuation & Estimates

Shares of BlackBerry have surged 27.8% in the past month against the Internet-Software industry’s decline of 9.9%.

Regarding the price/book ratio, BB is trading at 9.74, higher than the industry’s multiple of 4.39.

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been unchanged over the past 60 days.

BlackBerry currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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