BlackBerry Jumps 6% as Record QNX Backlog Extends Rally, Now Up 149% YTD; Mobileye Drops 4%, Aptiv Dips

A record royalty backlog at the QNX software unit is pulling BlackBerry Limited (NYSE:BB) away from the rest of the vehicle technology group, and the gap is widening as automotive hardware names slip. BlackBerry stock has risen 6% to $9.45 during afternoon trading, extending the advance that followed the company’s backlog disclosure. That run leaves BlackBerry stock up 149% year to date, a gain that reflects rising conviction that QNX has become the company’s primary growth engine.

Meanwhile, Mobileye (NASDAQ:MBLY | MBLY Price Prediction) stock is down 4% to $7, moving in the opposite direction from BlackBerry despite its own deep ties to automakers. Aptiv (NYSE:APTV) stock is down 0.6% to $44.79, a far softer slip than Mobileye’s.

The Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is up 0.1% to $30.78, barely moving for a fund built around self-driving cars and battery-powered transportation. Broader stocks are stronger, with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) up 0.6% to $773.72. Against a rising broad market and a flat vehicle technology fund, the gain in BlackBerry stock reads as a story specific to QNX.

Record QNX Backlog Powers BlackBerry’s Breakout

BlackBerry said Tuesday morning that its QNX division’s royalty backlog had exceeded $1.2 billion, a record for the business. Management credited growing adoption of its QNX Software Development Platform. It also credited the first deal for Alloy Kore, its core automotive operating system, which BlackBerry called the largest design win in QNX’s history. Wins in robotics, industrial automation and medical devices also added to the backlog, extending QNX’s reach beyond the car.

QNX licenses operating system software to automakers and earns royalties as vehicle programs enter production, so the backlog represents revenue that could arrive as those launches ramp. Alloy Kore’s debut win also gives the bull case a second product to lean on.

Mobileye and Aptiv Miss Out on the QNX Lift

Mobileye sells driver-assistance chips and Aptiv supplies vehicle electronics and software, which gives both companies heavier hardware content than BlackBerry carries, while BlackBerry’s QNX earns licensing royalties on operating system software that runs across a wide range of vehicle programs. That difference in business models helps explain the split between BlackBerry stock and its auto technology neighbors.

Diversification explains the Global X fund’s muted reading, since the ETF spreads its money across automakers, chipmakers, battery suppliers and software names. Both BlackBerry stock and Mobileye stock are components of the fund, so their opposing moves partly offset each other.

QNX Backlog Conversion Is BlackBerry’s Next Proof Point

BlackBerry now faces the question of whether the QNX backlog turns into royalty revenue as customer programs ramp. Royalty timing depends on automakers moving vehicle programs into production on schedule, and any delay could slow how quickly the record backlog appears in reported results. BlackBerry’s coming quarterly reports may show whether that conversion holds as more launches arrive.

With BlackBerry stock this extended and the sector environment quiet, sharp swings in either direction are a real possibility. Mobileye and Aptiv shares offer no confirmation from the rest of the auto technology group, which leaves BB stock carrying the move on its own. When all is said and done, share position sizes should stay modest until QNX’s backlog conversion resolves.

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