Stocks

BlackBerry Ltd Stock Still Climbing On Baidu Deal As Bulls, Bears Debate

BlackBerry Ltd (NYSE:BB) stock continued to climb on Friday, two days after the announcement that the company is working on software for self-driving cars in partnership with Baidu. Immediately following the announcement, BlackBerry stock soared to its highest level in four years on the Toronto Stock Exchange. The firm’s U.S.-listed shares had surged to their highest level in more than four years by early Friday.

BlackBerry stock BBRY

BlackBerry stock up more than 20%

In a post for MarketWatch, ChartYourTrade founder Michael Lamothe describes BlackBerry stock as “a beast” because investors are still buying it even though it has been trading around its 40-week moving average. BlackBerry stock is up by more than 20% following the news about the Baidu partnership.

BlackBerry stock bulls have been focusing on the company’s automotive operating system QNX more and more as the company moves further and further into the software business. The deal with Baidu makes QNX one of the operating systems supported by Baidu’s self-driving vehicle platform Apollo.

The China-based search giant revealed Apollo in April 2017, touting it as the self-driving vehicle industry’s “Android.” Baidu has signed a number of big automakers, including U.S.-based Ford, South Korea’s Hyundai, and several domestic auto brands.

Bulls face off with bears on BlackBerry stock

In dueling posts for Seeking Alpha, bulls and bears disagreed about the importance of the Baidu deal for BlackBerry stock. Contributor Larry Ramer notes that bears have argued that BlackBerry won’t be able to earn much revenue from autonomous cars, but he argued that there are several ways for the company to do it, including via ad sales, sales of consumer data on its users, additional security features and apps. He pegs BlackBerry’s revenue potential from autonomous cars at $4 billion in ten years.

On the other hand, Paulo Santos argued that the Baidu deal isn’t particularly important for BlackBerry stock, noting that QNX is actually the second automotive operating system Apollo will support, with Linux being the first.

Why the Baidu partnership could be more important than others

BlackBerry’s partnership with China’s Baidu isn’t the first deal the company has made in self-driving cars, as the Canadian firm has also entered into similar partnerships with chip maker Qualcomm and auto parts supplier Delphi. Santos argued that the Baidu partnership isn’t any different from the deals BlackBerry signed with Qualcomm.

However, Trefis analysts argue that the Baidu deal is more important than those other deals because it could open the door for the company in China, the biggest auto market in the world. They said in a recent note that Baidu approaches self-driving cars by focusing on scale and leverages its strengths in artificial intelligence and deep learning to do it.

BlackBerry stock added another 2% onto this week’s gains on Friday, climbing as high as $14.10 on the New York Stock Exchange. The company’s Toronto-listed shares tacked another 1% onto BlackBerry stock’s gains for the week, rising as high as C$17.45.

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