BlackBerry stock: can QNX and software-defined vehicles drive a turnaround?

From smartphone pioneer to software specialist

For many investors, BlackBerry remains closely associated with the smartphones that became a symbol of secure mobile communication in the early 2000s. The Canadian company, however, has changed fundamentally over the past decade.

The former hardware business now plays only a marginal role. BlackBerry has shifted its focus towards cybersecurity software and safety-critical operating systems for the automotive industry, industrial applications and other connected systems. That transformation is what makes the stock interesting again for some long-term investors, even though the turnaround has unfolded more slowly than many market participants had hoped.

QNX sits at the centre of the investment case

The heart of the company today is QNX, a real-time operating system designed for environments where reliability, security and uptime are essential. QNX is already used in more than 250 million vehicles worldwide and is deployed by carmakers including Mercedes-Benz, BMW, Volkswagen, Stellantis, Ford, General Motors and others.

The software is used in infotainment systems, driver-assistance features, digital cockpits and other safety-critical vehicle functions. As the automotive industry moves towards the software-defined vehicle, that kind of embedded technology is becoming increasingly important.

Autonomous driving could expand the opportunity

The trend towards autonomous and increasingly connected vehicles could create longer-term opportunities for BlackBerry. Modern cars contain millions of lines of code and are becoming high-performance computers on wheels. At the same time, automakers face rising requirements around cybersecurity, functional safety and over-the-air software updates.

That creates demand for stable operating systems that can meet high safety standards while remaining flexible enough to support new features. This is the market segment in which QNX has built a strong competitive position.

Beyond automotive software

The automotive industry is not the only area that could support future growth. Real-time operating systems are also becoming more important in robotics, medical technology, industrial automation, defence and aerospace.

As machines become more connected and artificial intelligence is embedded into more industrial processes, new use cases are emerging for safety-critical software. BlackBerry's long history in secure communication and embedded systems could therefore become more valuable if those markets continue to expand.

Cybersecurity remains a tougher market

Alongside QNX, BlackBerry continues to operate a cybersecurity business focused on protecting companies and public-sector organisations from digital attacks. This area, however, remains more challenging.

Competition is intense, with companies such as CrowdStrike, Palo Alto Networks, Fortinet and Microsoft having grown much faster in recent years. BlackBerry has not expanded its market position to the same extent and is increasingly focused on specialised security solutions for governments, critical infrastructure and industrial applications.

Why the valuation remains cautious

This backdrop helps explain why the market has remained cautious towards BlackBerry shares. While many technology companies benefited sharply from enthusiasm around artificial intelligence and cybersecurity, BlackBerry is still in a transition phase.

Investors have been waiting for the technological strength of QNX to show up more clearly in revenue and earnings growth. So far, that process has been slower than expected, leaving the stock caught between the promise of its software assets and the reality of limited near-term growth momentum.

Patents and embedded software remain key assets

BlackBerry still has several notable competitive advantages. Its patent portfolio remains one of the company's most valuable assets, reflecting decades of work in encrypted communication and secure software. Those patents may continue to support licensing income, partnerships and strategic options.

At the same time, QNX could gain strategic importance as vehicles become more digital, connected and autonomous. If software-defined vehicles become a larger part of the auto industry's investment cycle, BlackBerry may be viewed less as a legacy handset business and more as an infrastructure provider for safety-critical systems.

Turnaround stock or infrastructure play?

For investors, the central question is whether BlackBerry should be seen primarily as a turnaround story or as a longer-term infrastructure play. Short-term growth drivers still appear limited, but the broader adoption of software-defined vehicles, robotics and intelligent industrial systems could eventually support a reassessment of the business.

The risks remain significant. Growth has been muted, the cybersecurity market is highly competitive and the company remains exposed to investment cycles in the automotive sector. If carmakers slow spending on new software platforms, that could weigh directly on BlackBerry's growth outlook.

What could change the market's view?

The opportunity is that the same cautious starting point also leaves room for a change in perception. If QNX strengthens its role as a standard platform for software-defined vehicles and BlackBerry can expand into robotics, industrial automation or defence applications, the company could begin to look very different to investors.

BlackBerry is also sometimes discussed as a potential takeover candidate because of its patent portfolio and its established position in automotive software. For now, though, the stock remains a turnaround and infrastructure story whose future depends on whether the company can convert its technical strengths into more durable revenue and profit growth.