Overview
Stifel initiated coverage of BlackBerry with a Buy rating and a $12 price target, making the case that investors are undervaluing the company's positioning as a foundational software provider for the emerging physical AI market. The brokerage framed BlackBerry not merely as an automotive software supplier but as a mission-critical software layer that supports AI-enabled vehicles, robotics, industrial automation systems and medical devices.
QNX and industry partnerships
Central to Stifel's thesis is BlackBerry's QNX operating system. The brokerage describes QNX as a leading safety-certified platform that complements compute offerings from partners including NVIDIA, Qualcomm and AMD. Stifel argues this combination places QNX at the heart of safety-critical embedded architectures and underpins longer-term, recurring revenue dynamics.
Royalty backlog and revenue visibility
Stifel highlighted a growing royalty backlog for QNX that reached roughly $950 million in fiscal 2026. The firm said this backlog provides multi-year visibility into revenue and supports a higher-quality, recurring revenue profile for the business. Importantly, the brokerage noted the backlog has continued to expand despite weakness in global automotive production, which Stifel interprets as evidence of sustained design-win momentum.
Expansion beyond automotive
The report underscores substantial growth potential for QNX outside the automotive sector. Stifel states that general embedded markets - including factories, robotics and healthcare - already represent about 20% of QNX revenue. Recent design wins cited in the coverage include an AI-enabled heart pump project for Johnson & Johnson and deployments in industrial automation. Stifel estimates that, as physical AI adoption broadens, BlackBerry could ultimately address a revenue opportunity more than ten times the size of its current QNX business.
Secure Communications unit
Beyond QNX, Stifel suggested BlackBerry's Secure Communications division is recovering after years of decline and could benefit from rising government demand for sovereign, secure communications. The brokerage pointed to recent customer wins that include the U.S. Internal Revenue Service, Germany's Bundesbank and other government agencies. It also noted that annual recurring revenue in the segment grew 5% year-over-year in the latest quarter.
Financial outlook and near-term expectations
Stifel's forecasts call for BlackBerry revenue to increase nearly 10% in fiscal 2027 to about $602 million, up from roughly 3% growth in fiscal 2026. The firm models adjusted EBITDA rising to $122 million from $107 million, reflecting margin expansion and stronger free cash flow generation. Looking to the immediate reporting cycle, BlackBerry is scheduled to announce fiscal first-quarter results on June 25. Stifel expects roughly $136 million in revenue and approximately $21.5 million of adjusted EBITDA for that quarter, broadly in line with consensus.
Implications
Stifel's initiation positions QNX and the Secure Communications business as the primary levers underpinning the bullish view. The brokerage's emphasis on royalty backlog, design wins across embedded markets and recent government contracts forms the foundation for its forecasts and $12 price target.