BlackBerry gains bullish backing as Stifel initiates coverage

Investing.com -- BlackBerry received a bullish endorsement from Stifel, which initiated coverage of the software company with a Buy rating and a $12 price target, arguing that investors continue to undervalue its position as a key infrastructure provider for the emerging physical AI market.

The brokerage said BlackBerry is no longer simply an automotive software supplier, but instead serves as a mission-critical software layer underpinning AI-enabled vehicles, robotics, industrial automation systems and medical devices. Stifel highlighted the company's QNX operating system, which it views as a leading safety-certified platform used alongside computing technologies from NVIDIA, Qualcomm and AMD.

According to Stifel, BlackBerry's QNX business benefits from a growing royalty backlog that reached roughly $950 million in fiscal 2026, providing multi-year revenue visibility and supporting a higher-quality, recurring revenue profile. The firm said the backlog continues to expand despite weakness in global automotive production, reflecting sustained design-win momentum.

The brokerage also sees significant growth potential outside the automotive market. General embedded markets, including factories, robotics and healthcare, already account for about 20% of QNX revenue, with recent wins including an AI-enabled heart pump project for Johnson & Johnson and industrial automation deployments. Stifel estimates BlackBerry could ultimately address a revenue opportunity more than ten times larger than its current QNX business as physical AI adoption expands.

Beyond QNX, Stifel argued that BlackBerry's Secure Communications division is emerging from years of decline and could benefit from increasing government demand for sovereign and secure communications. The report cited recent customer wins including the U.S. Internal Revenue Service, Germany's Bundesbank and other government agencies, while annual recurring revenue in the segment grew 5% year-over-year in the latest quarter.

Looking ahead, Stifel forecasts BlackBerry's revenue will rise nearly 10% in fiscal 2027 to about $602 million, accelerating from 3% growth in fiscal 2026. The firm expects adjusted EBITDA to increase to $122 million from $107 million, supported by expanding margins and stronger free cash flow generation.

BlackBerry is scheduled to report fiscal first-quarter results on June 25. Stifel expects revenue of approximately $136 million and adjusted EBITDA of $21.5 million, broadly in line with consensus expectations.

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