Can BlackBerry's QNX Capitalize on Emerging GEM Opportunities?

BlackBerry Limited’s BB QNX business continues to expand beyond its established automotive operations by pursuing opportunities in the General Embedded Market (GEM), which includes industrial automation, medical instrumentation, robotics and physical AI. While automotive remains the foundation of QNX’s strategy, the company views GEM as a significant growth opportunity. Approximately 20% of QNX’s revenue currently comes from non-automotive verticals, and management believes the addressable market in these areas could potentially be larger than the automotive market.The technology developed for automotive applications has been intentionally designed to be adaptable for adjacent industries, and BlackBerry has been investing in its go-to-market strategy to increase adoption. Although sales cycles in these verticals are generally long, the company stated that the pipeline it has been building is beginning to convert into customer wins.In the fourth quarter of fiscal 2026, BlackBerry secured an important General Embedded Development Platform (GEDP) win for deployment in industrial automation controls with a major North American OEM. The company also recorded several additional wins in industrial automation, which it considers a key target vertical. In medical instrumentation, QNX OS for Safety was selected by Johnson & Johnson to power a new AI-driven heart pump. Management highlighted robotics as one of its most promising long-term opportunities, driven by the growth of physical AI. BlackBerry stated that QNX has already established itself as a platform for physical AI through its broad deployment in autonomous driving, where vehicles function as highly complex robotic systems.The company also emphasized that its partnerships are expected to support future expansion. Arm recently introduced its Arm AGI CPU for physical AI and identified QNX as one of its foundational software ecosystem partners during the launch. BlackBerry also continues to maintain strong relationships with leading silicon providers, including NVIDIA and Qualcomm, which are expanding their presence in physical AI. Management highlighted that the company is building momentum in its robotics pipeline and expects this vertical to become a meaningful contributor to GEM growth over time. It also stated that robotics and physical AI are likely to be among the fastest-growing segments within the three GEM verticals the company is targeting, alongside industrial automation and medical instrumentation.For fiscal 2027, BlackBerry expects revenues to grow 6-11% to $584-$611 million. BlackBerry expects QNX revenues of $290-$307 million, with the higher end implying nearly 15% growth and serving as its target. However, due to macroeconomic uncertainty, it has included some downside risk to the lower end of the range.Taking a Look at BB’s CompetitorsCrowdStrike CRWD remains leveraged to sustained cybersecurity demand as customers consolidate tools on the Falcon platform and expand module adoption through subscriptions and Falcon Flex. AI-led launches, including agent-based workflows, broader data and browser protection, and deeper partnerships across the cloud ecosystem, support cross-sell and renewals over time. Recent acquisitions in identity and browser runtime security extend the platform’s addressable use cases, while the company’s liquidity and cash generation provide the flexibility to keep investing. For fiscal 2027, the company raised its net new ARR growth guidance by 520 basis points at the midpoint and updated its full-year view to include total revenues of $5.91-$5.95 billion and ARR of $6.53-$6.55 billion.Palo Alto Networks PANW continues to benefit from higher cybersecurity priority as enterprises deploy AI and look to consolidate vendors onto fewer platforms. Platformization is translating into larger commitments, supported by expanding next-generation security ARR and RPO, and management guidance implies continued growth in the fourth quarter of fiscal 2026. Momentum in Network Security, SASE and Prisma AIRS, along with early execution on the CyberArk and Chronosphere integrations, supports the long-term revenue mix shift toward recurring software and free cash flow. For fiscal 2026, Palo Alto Networks expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%.BB Price Performance, Valuation & EstimatesShares of BlackBerry have surged 41.8% in the past month compared with the Internet-Software industry’s growth of 0.5%.Image Source: Zacks Investment ResearchRegarding the price/book ratio, BB is trading at 6.93, higher than the industry’s multiple of 4.35.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for BB earnings for fiscal 2027 has been unchanged over the past 60 days.Image Source: Zacks Investment ResearchBlackBerry currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks