Investors flocked to BlackBerry 
BB Monday morning after the company announced a strengthening of its integration with the artificial intelligence (AI) juggernaut – Nvidia 
NVDA.
At Hannover Messe, the Canadian company announced that it had reached an agreement to integrate its QNX OS for Safety 8.0 with NVDA’s IGX Thor platform, moving from its automotive stronghold to the emerging world of “Physical AI”.
BlackBerry shares have been a lucrative investment this month – currently up about 75% since the beginning of April. However, significant risks remain and warrant consideration of reducing exposure to BB at current levels.
Cybersecurity remains a barrier for BlackBerry
While IoT and particularly the QNX division have become Wall Street favorites, BlackBerry’s historic cybersecurity business still weighs on the company’s overall performance.
Despite efforts to modernize its suite led by Cylance, the division is fighting a “difficult battle” against leading players like CrowdStrike and Microsoft.
According to recent data, the dollar-denominated net retention rate (DBNRR) continues to struggle to stay above the critical 100% threshold, indicating that the company is losing ground within its existing customer base.
For the investor, this creates a two-tier story: a high-growth robotics software company attached to a low-growth security business.
Until BB stock can demonstrate that its cybersecurity segment has stabilized and can contribute meaningfully to the bottom line without deep discounts, the overall margin profile will remain vulnerable to erosion.
BB shares are no longer attractive in terms of valuation
After today’s surge, BlackBerry’s valuation has entered territory that fundamental analysts describe as “priced for perfection.”
Trading on a forward PE (P/E) of approximately 43x, it not only commands a significant premium to the broader North American software sector, it is even more expensive to own than NVDA itself.
BB’s current valuation assumes that the partnership with Nvidia will result in immediate and frictionless scaling. History suggests, however, that the market often rises despite concerns, but corrects abruptly when reality sets in.
At these levels, any slight revision to forecasts or a small hiccup in the royalty book could trigger a wave of massive selling.
With an RSI in the low 90s indicating dangerously overbought conditions, the risk/reward ratio of BlackBerry stock has become frankly unattractive to new investors.
Long sales cycles in Physical AI
Finally, while the transition to Physical AI – humanoid robots and autonomous medical devices – is undeniably visionary, it introduces timing risk that momentum traders may overlook.
Unlike consumer software or even traditional enterprise SaaS, the industrial and medical sectors operate on glacial sales cycles defined by rigorous security certifications and multi-year testing phases.
Clearly, a “design win” announced today in surgical robotics may not generate a single dollar of high-margin royalties before 2028 or 2029.
This creates a large execution gap where BB shares anticipated actual cash flows.
Investors must weigh the current hype with the reality that the $950 million royalty backlog is a long-term asset that cannot be liquidated overnight to satisfy short-term earnings estimates.
If the overall AI infrastructure trend cools, BlackBerry’s long-term revenue promises may not be enough to support its current level.
