Having identified many positive catalysts that may arise for Blackberry (NYSE:BB) in the weeks and months to come, I remain very optimistic about BlackBerry.
Blackberry CEO John Chen had previously predicted that new additions to the company’s sales team would begin to have a positive impact in the middle of next year.
Additionally, one of BlackBerry’s major partners appears poised to secure lucrative government contracts.
Finally, the company recently announced an agreement that indicates it is further penetrating the large and lucrative Chinese auto market.
During the June first quarter earnings call, Chen predicted that the new high-quality sales professionals the company was hiring would start contributing to its bottom line by mid-2022. The CEO noted that the company had planned to increase its sales force by around 23% between February and the end of July.
Meanwhile, last month, Microsoft (NASDAQ:MSFT) attended a meeting at the White House regarding the need to address cybersecurity threats as a country.
Microsoft has been a key partner of BlackBerry.
“Cyber security is a national security and economic security imperative for the Biden administration and we are prioritizing and elevating cybersecurity like never before,” according to a White House press release.
The White House added that Microsoft has said it will invest $ 20 billion over the next five years to accelerate efforts to integrate cybersecurity by design and deliver advanced security solutions.
Microsoft and BB Stock Plan
In the past, Microsoft and BlackBerry have partnered on several key cybersecurity initiatives. For example, in June 2019, the two companies announced that they would secure Microsoft’s offerings on mobile devices with BlackBerry’s Dynamic system.
Last October, BlackBerry announced that its “AtHoc” program, used to help organizations respond effectively to crises, would be integrated with Microsoft Teams.
Of course, Teams is Microsoft’s employee cooperation tool.
Given the cybersecurity partnerships between Microsoft and BlackBerry, and BlackBerry’s strength in the latter area, there’s a good chance BlackBerry will benefit greatly from Microsoft’s upcoming investments in the space.
A new deal in China
On August 26, BlackBerry announced that the Chinese automaker Engines of the Great Walls would use an advanced digital cockpit controller platform developed by BlackBerry and its partner Nobo.
The platform was built on the BlackBerry QNX Neutrino real-time operating system (RTOS) and the QNX hypervisor. Great Wall Motors intends to use the system for its new SUV.
An SUV maker, Great Wall generated CNY 103.3 billion in revenue, just over $ 16 billion last year, according to Reuters.
After BlackBerry won an agreement to develop autonomous driving systems with Baidu (NASDAQ:BIDU) in 2018, then expanded the deal earlier this year, the deal with Great Wall shows that the Canadian tech company continues to make major inroads into the huge Chinese auto market.
Other positive catalysts
On August 24, BlackBerry announced test results for two of its AI-powered computer security products.
In the trials, conducted by SE Laboratories, BlackBerry systems detected and fully protected against all threats.
“In any case, the threats could not have gone beyond the early stages of the attack chain,” BlackBerry reported.
Overall, the test results once again show that BlackBerry is developing top-notch computer security products. Specifically, they indicate that the company has done a good job integrating Cylance’s AI technology into its IT security offerings.
Finally, I continue to believe that two more upcoming positive catalysts will move the needle in a positive direction for BB action: the launch of an automotive apps store in partnership with Amazon (NASDAQ:AMZN) and the sale of a large portion of BlackBerry’s patent portfolio.
Chen had appeared to suggest that the patent deal would be concluded by July 31.
Afterwards, I figured we could get an announcement of the deal over the Labor Day weekend. Neither scenario has unfolded, but I have no doubt that Chen will shed more light on the matter when BlackBerry releases its fiscal second quarter results on September 22.
Chen announced that a beta version of the App Store will launch next month. Hopefully we’ll find out more about the kickoff on September 22.
After seeing the App Store, Wall Street will, I believe, become much more excited about its potential.
The result on BB Stock
Microsoft’s decision to spend a lot of money on cybersecurity and the growing proliferation of BlackBerry systems in China is great news for Blackberry. In the meantime, the company’s new salespeople should boost its results in the medium and long term.
In addition, BB stock already had several powerful catalysts before these recent developments. In view of these points, I continue to recommend that investors buy BB shares.
At the date of publication, Larry Ramer held a long position in BlackBerry. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines.
Larry Ramer has researched and written articles on US equities for 13 years. He was employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing articles for InvestorPlace in 2015. Some of his highly successful contrarian picks include GE, Solar Stocks, and Snap. You can reach him on StockTwits at @larryramer.