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BlackBerry (BB) Teams Up With AMD on Robotics Platform, Up 7%

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BlackBerry (BB - Free Report) has teamed up with Advanced Micro Devices (“AMD”) to boost the development of an advanced robotic systems platform. The platform is being designed to augment performance, scalability and dependability for robotic systems in industrial and healthcare verticals. Following the announcement, shares of BlackBerry gained 7.6% and closed trading at $3.10 on Apr 9.

Advanced Micro Devices is a dominant name in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider.

Per the agreement, the new robotics platform will leverage BlackBerry’s QNX expertise in real-time foundational software solutions and QNX Software Development Platform as well as hardware solutions powered by AMD’s Kria K26 SOM. AMD’s Kria K26 SOM includes both Arm and FPGA programmable logic-based architecture.

This particular integration will aid in sensor fusion, while augmenting high-performance data processing and real-time control. It will also aid in reducing latency in robotic applications. Streamlining of software and hardware components will aid consumers in boosting process development and reduce time-to-market for robotic solutions.

Headquartered in Waterloo, Canada, BB provides intelligent security software and services to enterprises and governments worldwide. The company uses machine learning and artificial intelligence (AI) to provide cutting-edge solutions for cybersecurity, safety, and data privacy.

BB plans to separate the IoT and Cybersecurity businesses into standalone entities but will no longer pursue IPO of the IoT business. The separation is anticipated to unlock value for all shareholders. Moreover, it will also extend more flexibility to each business to follow its own growth strategy and capital allocation policy.

The company recently reported fourth-quarter fiscal 2024 (ended Feb 29) results wherein adjusted earnings per share came in at 3 cents. In the year-ago quarter, it incurred non-GAAP loss of 2 cents. The Zacks Consensus Estimate was pegged at a loss of 3 cents. Quarterly total revenues were $173 million compared with the prior-quarter revenues of $151 million.

BlackBerry’s fourth-quarter performance benefited from healthy traction across Cybersecurity owing to solid momentum in the Spark product group, which includes Cylance and UEM. The IoT unit benefits from rising demand for BB’s solutions in the automotive market and robust QNX development seat revenue. Rapid adoption of the QNX platform in the General Embedded market is a positive factor.

Management projects positive operating cash flow and adjusted EBITDA for fiscal 2025 owing to various cost reductions. The company expects fiscal 2025 total revenues in the range of $586-$616 million.

However, it expects first-quarter IoT revenues to be affected by material delays in software-defined vehicle programs. Also, ongoing budget constraints by some of its leading government customers amid volatile macroeconomic backdrop is a major headwind.

BB currently sports a Zacks Rank #1 (Strong Buy). The stock has fallen 32.4% in the past year against the sub-industry’s growth of 45.7%.

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Image Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks worth consideration in the broader technology space are Synopsys (SNPS - Free Report) , Iridium Communications (IRDM - Free Report) and Pegasystems (PEGA - Free Report) . While SNPS and IRDM sport a Zacks Rank #1 each, PEGA carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SNPS’ fiscal 2024 EPS is pegged at $13.28. The long-term earnings growth rate is 17.5%. SNPS’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have soared 49.9% in the past year.

The Zacks Consensus Estimate for IRDM’s 2024 EPS has increased 213% in the past 60 days to 72 cents. Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed twice. The average earnings surprise is 91.7%.

The Zacks Consensus Estimate for PEGA’s 2024 EPS has increased 19.4% in the past 60 days to $2.77. Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed the same in the remaining quarters. The average earnings surprise is 1063.8%. Shares of PEGA have gained 36.5% in the past year.

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