The hype is back. BlackBerry stock jumped 297% between April 1 and June 30, 2026, followed by a sharp 38% dip in July. The reason to justify this rally? Many credit the fiscal first-quarter 2027 earnings released on June 25, 2026, which pushed the stock up 46% in four days. Was the growth of 26% in revenue and 144% in adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in a single quarter enough to justify the rally?
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In my opinion, BlackBerry stock isn’t all that
Call it coincidence, but April and May saw new short-selling activities in Avis Budget Group and GoPro. Avis Budget Group stock surged 390% between April 1 and 21 and then fell 78% by May 8.
While the new meme stocks saw short sale activity in April and May, 2021 meme stocks such as GameStop, AMC Entertainment Holdings, and BlackBerry (TSX: BB) also saw a sharp upward momentum that prolonged till June before the big fall. Those who burnt money in the 2021 meme frenzy know that hype around these stocks isn’t all that.
Activity is returning in September, as BlackBerry’s second-quarter earnings released on September 24 revived momentum. While analysts and investors had reasons to rejoice, none of that justified 4 times share price growth in just 90 days from $4 to $18.
Possible reasons for BlackBerry’s 2026 rally
BlackBerry has been trying to turn the company around by focusing on its strength: QNX operating systems used in automotive, robotics, medical systems, industrial applications, and physical artificial intelligence (AI).
Reason #1: Alloy Core
BlackBerry has changed its approach. Instead of relying on global vehicle production to grow, it is increasing content per vehicle by adding Alloy Core to QNX, which will triple the average selling price per instance.
Is it a good enough reason for a 3 times jump in share price?
If Alloy Core adds to the QNX backlog, it will take a long time to materialize into revenue, with no assurance of when. BlackBerry pitches the QNX system to automakers and other device makers. They approve the design and use QNX in their devices in return for a royalty fee per device. However, BlackBerry recognizes QNX revenue when production takes place.
Thusly, BlackBerry’s QNX revenue will continue to accumulate and be cyclical like automotive production.
Reason #2: Strong earnings and revised fiscal 2027 guidance
The 26% revenue growth in the first and second quarter is from the past QNX backlogs. A core reason for 144% adjusted EBITDA growth is an increase in licensing revenue. Licensing has a 90% net profit margin, but its revenue is one-off.
BlackBerry has revised its fiscal 2027 guidance, increasing its revenue from QNX and decreasing it in Security Communications due to delays in government contracts.
Instead of jumping into the rally and buying the stock above $12, I would rather wait to see if it can meet its guidance.
Reason #3: Beginning of BlackBerry’s turnaround
The turnaround has been long pending. The company offloaded Cylance cybersecurity and other non-profitable businesses to report profits. It is the first time that BlackBerry will report revenue growth after years of downsizing. But an 8.6x price-to-sales ratio has overvaluation written all over it.
The cliffhanger
BlackBerry’s turnaround story is currently a cliffhanger: while initial earnings growth shows signs of recovery, tariff wars and high inflation raise fears of a slowdown. Whether the growth stays or falls will be revealed in the next episode. If the stock rally was short-selling momentum, it will ease in the third and fourth rounds of a rally and dip.
