Flipping games are all the rage these days. Picking up stocks that have fallen due to the coronavirus pandemic and riding the wave higher has gone well for many investors.
The reality is that a Canadian software company Blackberry (TSX: BB) (NYSE: BB) hasn’t performed as well as other rebound games lately. Despite more than doubling from its 52-week low, BlackBerry shares have lost more than a quarter of their value since the start of December. However, I will explain why investors should not be concerned about the short term performance of this stock. Instead, I suggest investors focus on these three long-term catalysts that should drive this stock higher.
The Amazon deal is still ongoing
Multi-year BlackBerry agreement inked with tech giant Mega Cap Amazon.com (NASDAQ: AMZN) in December is still relevant. This deal is massive for BlackBerry shareholders and could inspire a wave of new investment in 2021.
The deal grants Amazon access to BlackBerry’s IVY platform, offering enhanced data collection for all information gathered by vehicle sensors. This platform is built with BlackBerry’s fully integrated QNX platform, which enables BlackBerry to offer a suite of software solutions to companies like Amazon. This could mean that future partnerships could be on the horizon for BlackBerry. If such partnerships were to come to fruition, we could see another peak in this company’s share price.
Security and cybersecurity will be more important than ever
BlackBerry’s track record as a cybersecurity-like, laser-focused company will be key to this long-term success. The company’s QNX platform, along with its IVY platform, will propel this company forward over time. John Chen, CEO of BlackBerry, has completely reoriented the company’s strategic focus towards software solutions focused on cybersecurity. I see this secular growth trend as the key investment thesis for this action as a long term growth game.
Secular trends resistant to the pandemic
The trends supporting the company’s software platforms are relatively immune to the effects of the coronavirus pandemic. Short-term headwinds linked to the pandemic were linked to expectations of a slowdown in auto production. Additionally, slower-than-expected adoption of BlackBerry software by automakers has soured sentiment somewhat.
Having said that, the markets have since shifted general sentiment to a much more bullish and bullish stance. I expect continued growth in the EV segment and this partnership with Amazon to drive up BlackBerry’s stock price. Growth investors should take note. Picking up stocks on lows like the one we’ve seen in recent weeks is a great idea.
Speaking of big tech growth stocks …
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Silly contributor Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. The Motley Fool owns stocks and recommends Amazon. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: January 2022 long calls at $ 1,920 on Amazon and January 2022 short calls at $ 1,940 on Amazon.