Stocks

BlackBerry Ltd Stock Surges Thanks To Jarvis, Its New Cybersecurity Solution For Cars

BlackBerry Ltd (NYSE:BB) unveiled its new cybersecurity service for vehicles, which it calls Jarvis, at the Detroit Auto Show this week, and it seems investors are optimistic about it. Analysts had good things to say about the BlackBerry Jarvis offering, which is being trialed by Jaguar Land Rover currently.

blackberry jarvis
Image source: BlackBerry (screen shot from video via YouTube)

BlackBerry Jarvis unveiled at Detroit Auto Show

CEO John Chen revealed the BlackBerry Jarvis cybersecurity offering at the auto show this week and said they hope to announce soon that Jaguar Land Rover will be their first official customer. The company putting its expertise working with enterprises on cybersecurity solutions to use in the automotive industry. The BlackBerry Jarvis software performs static code scanning in connected vehicles.

Macquarie analyst Gus Papageorgiou explained in a note on Tuesday that he had expected last year that Jaguar Land Rover would be the first automaker to confirm that it’s trying out BlackBerry’s automotive cybersecurity product. He added that the automaker seems to think the first trials of the BlackBerry Jarvis platform have been successful, as it has slashed a “formerly manual and expensive process that took 30 days to just seven minutes,” according to Papageorgiou.

He added that Ford’s chief technology officer was also on stage with Chen and mentioned how important the automaker’s partnership with BlackBerry is. The Ford executive also state that they are excited about trialing the BlackBerry Jarvis platform.

How the BlackBerry Jarvis solution works

Papageorgiou believes the first phase of the Jarvis cybersecurity solution will “operate on a transactional ‘pay-as-you-scan’ model,” with automakers and “Tier 1s” handling the cost. He explained that the static code scanning performed by Jarvis will be just phase one, and it requires uploading and checking before being implemented in vehicles.

However, he believes the future version of Jarvis will be more dynamic and that health checks and repairs could be conducted out in the field at some point. He also expects that consumers will eventually be downloading apps in the vehicle even while driving and predicts that scans, patches and/or updates will also be pushed out while cars are moving.

The Macquarie analyst believes that as soon as BlackBerry is able to deliver a solution such as this, the value proposition for consumers will “dramatically” improve along with “the economics of BB’s service.”

BlackBerry stock surges in heavy volumes on the NYSE

He also raised his price target for BlackBerry stock to US$15.50 / C$19.5 per share. His new price targets are based on a higher target multiple of 5.5 times EV/ sales. Papageorgiou reiterated his Outperform rating on BlackBerry stock as well, citing BlackBerry Jarvis, QNX and Radar as future drivers of growth..

BlackBerry stock surged on Tuesday in extremely heavy share volumes on the New York Stock Exchange, as more than 15.4 million shares had changed hands as the end of the trading session approached. The average daily trading volume is closer to 5 million shares, according to MarketWatch data. However, the excitement around BlackBerry stock gradually started to ease as the trading day wore on.

BlackBerry stock closed up 1.17% at $13.81 on Tuesday at the New York Stock Exchange.