During the September 17 episode of Mad Money, a caller asked whether to buy BlackBerry Limited (NYSE:BB), viewing it as a bargain given its approximately $950 million QNX royalty backlog, connected cars, robotics, medical applications, BlackBerry Radar, cybersecurity, and growing revenue streams. Jim Cramer replied:
I agree with you [buy, buy, buy]. We’ve had the company on. I am surprised that it came back down, but there’s been a lot of selling in some very good stocks. I’m with you.
Embedded Software Expansion And QNX Royalty Backlog Growth
BlackBerry Limited continues to expand its footprint across connected automotive platforms, powered by its QNX embedded operating system deployed globally by major automotive manufacturers. The company reported first-quarter fiscal 2027 results, with the QNX segment generating $72 million in revenue, representing a 26% increase compared to the same period in the prior year. The momentum is supported by a strong QNX royalty backlog sitting near $1 billion, providing clear long-term visibility as automakers integrate advanced digital architectures and physical artificial intelligence systems.
Valuation Multiples And Secure Communications Headwinds
Despite strong adoption in the automotive sector, the company still faces valuation risk and uncertainty over whether recent growth across its businesses can be sustained. BlackBerry Limited trades at a forward price-to-earnings ratio of approximately 44.84x based on its recent return to profitability and a market capitalization of $4.7 billion.
In addition, the company operates in a competitive environment where major automotive manufacturers and tech giants frequently explore open-source alternatives or proprietary Linux builds for software-defined vehicles, threatening long-term market share. The competitive threat is compounded by the extended multi-year lag between initial design wins and actual production royalty generation, leaving near-term earnings vulnerable if vehicle production cycles encounter delays or macroeconomic headwinds.
Institutional Tracking And Short Interest Dynamics
According to Insider Monkey database tracking over 1,000 hedge funds, 31 hedge funds held positions in the company during the second quarter, marking a notable increase from 19 funds in the prior quarter. At the same time, short interest accounts for 6.19% of the public float, reflecting moderate bearish sentiment as investors assess whether BlackBerry can sustain its recent improvements in growth, profitability and cash generation.
As Cramer pointed out, broad market sell-offs often push down fundamentally sound companies unfairly, meaning that patient investors willing to look past near-term secure communications headwinds can capitalize on its almost billion-dollar QNX backlog backed by growing institutional sponsorship. However, until BlackBerry Limited can translate its 26% QNX growth and almost billion-dollar QNX royalty backlog into sustained profitability, a high multiple leaves the stock vulnerable to multiple compression.
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