Long gone are the days of the BlackBerry cellphone -- and it appears that BlackBerry's first-quarter earnings have convinced Wall Street to forget about the previous iteration of the business.
BlackBerry stock surged 23% to $10.62 on Thursday, with shares on track to close at their highest level since November 19, 2021, according to FactSet.
The move comes after the company's fiscal 2027 first-quarter earnings surpassed Wall Street's expectations on the back of a key software layer for physical artificial intelligence.
BlackBerry reported early Thursday adjusted earnings of 4 cents a share for the quarter ended May 31, compared to 2 cents a year ago and above Wall Street's forecast of 3 cents. Revenue grew 26% year-over-year to $152.9 million, well above the consensus call for $137.2 million, according to FactSet.
Guidance also impressed, with the company hiking its fiscal 2027 profit forecast to 16 cents to 20 cents per share, up from 15 cents to 19 cents, on revenue between $594 and $621 million. The midpoint of BlackBerry's revenue outlook is above Wall Street's $604.1 million view, while the company's expected earnings are inline with expectations.
But the basis for Wall Street's enthusiasm around BlackBerry lies in the company's software called QNX, which acts as a secure software system in autonomous AI vehicles.
CEO John Giamatteo said on an earnings call Thursday that the company is benefiting from physical AI demand for QNX. Historically, BlackBerry's QNX software has been used primarily by automotive systems, but the company has been looking to expand into industrial automation, robotics, and physical AI applications.
"We remain confident in the long-term opportunities in front of us. That confidence is grounded in the multiple long-term growth drivers we see across QNX, many of which are in their early stages and have the potential to create significant shareholder value over time," Giamatteo said.
BlackBerry expects QNX revenue in the fiscal second quarter to come in between $70 million and $75 million, representing about 15% growth from last year. For the full fiscal year, BlackBerry sees ONX sales increasing 13% from a year ago.
BlackBerry has already made inroads into the AI economy, and operates as a partner with Nvidia, Qualcomm, and Arm Holdings. Giamatteo said on the earnings call that these partnerships "strengthen" its market position for "next-generation intelligence systems."
"As intelligent machines become increasingly autonomous and operate around people, the requirements for safety, security, reliability, and real-time determinism become even more important," he added. "Unlike probabilistic AI systems, QNX technology is deterministic and safety-certified, which is exactly why it is so hard to replicate and why customers trust it for systems where failure is not an option."
For now, Wall Street is still cautious when it comes to BlackBerry, even as shares have logged a 175% advance this year and have gained 120% over the past 12 months. Of the nine firms polled by FactSet, BlackBerry has an average Hold rating with a price target of $7.27.
Write to Kit Norton at kit.norton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 25, 2026 15:11 ET (19:11 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments