Prediction: 2 Stocks That Will Be Worth More Than BlackBerry in 5 Years

Blackcurrant Limited (BB 1.29%) used to be a big deal. The Canadian giant of the early smartphone market once had a market cap of $83 billion and generated a whopping $20.6 billion in annual revenue.

BlackBerry refocused on cybersecurity services and connected car software, and enjoyed a brief recovery in 2019 and 2020. Unfortunately, BlackBerry sales have fallen 40% in five years, and the stock is worth just $1.4 billion today.

The stock is down 66% over the past five years, or an average annual loss of 19.4%. Let’s say BlackBerry can stabilize a bit and the stock only drops 15% per year over the next five years. In this scenario, it would be worth about $600 million in late summer 2029.

You could bet on another turnaround in BlackBerry’s long and chequered history, but I’m not sure the company has a lasting position in the highly competitive data security industry.

Instead, I’d suggest looking at some of the smaller, hungrier tech stocks that are on the rise. Overwhelm (OB 0.20%) and expert in business intelligence BigBear.ai (BBAI 3.19%) seem poised to outperform the market in the next five years. They may be small now, but I expect them to surpass BlackBerry’s market cap by 2029.

BigBear.ai: Market Cap of $413 Million

Artificial intelligence (AI) has been around for decades, but AI technology is now driving all kinds of business growth. Companies are collecting tons of data about customers, devices, and other endpoints to gain an advantage by analyzing it with AI tools. They then let AI tools analyze that data pile to gain a competitive edge.

BigBear.ai can play a useful role in that AI-based analysis process. The company specializes in supply chain management and digital identity tracking, helping shipping companies, manufacturers and defense contractors optimize their operational decisions.

The company was founded in 1988, but didn’t go public until December 2021. Yes, just a few weeks after the inflation panic began on Wall Street. On top of that unfortunate timing, BigBear.ai opted to enter the market via a special purpose acquisition company (SPAC), a method that had been popular the year before but quickly fell out of favor. SPAC companies are now often seen as extra risky investments.

But investors may be quick to forget BigBear.ai’s SPAC history. The company is now winning a bunch of big contracts, including a passenger safety deal with Heathrow Airport. In another recent win, BigBear.ai won a role as a data management subcontractor for the Federal Aviation Administration (FAA). The ability to win these big contracts is a big advantage, and I can’t wait to see who signs up for BigBear.ai’s help next.

Earnings are currently volatile, but BigBear.ai is approaching breakeven after a few years of negative earnings and cash flows. This company entered the market under difficult circumstances, but I expect it to do well in the near future.

Outbrain: Market Cap of $252 Million

Here’s another market launch amidst the severe inflationary headwinds. Outbrain has been managing web-based ad and content syndication streams since 2006, but saved its initial public offering (IPO) for the summer of 2021. An economic crisis was already brewing, on top of the steep decline in online traffic growth from the coronavirus lockdown period.

So Outbrain picked a terrible time to raise capital from a stock sale to pursue more ambitious growth. Ad buyers locked in their marketing budgets in 2022 because no one seemed ready to buy gear. That industry downturn is still playing out today, and Outbrain’s finances are suffering.

The downturn can’t last forever, however, and Outbrain is already showing positive signs. Adjusted earnings have been positive in three of the last four quarterly reports, and the company is generating modest cash profits. Meanwhile, other online advertising experts such as Alphabet And Snap achieved healthy turnover growth again after a period of drought.

Outbrain would need a hefty annual profit of around 19% to surpass the $600 million mark in five years. However, the company is also acquiring video-based advertising specialist Teads in a $1 billion buyout. The deal is expected to close in early 2025, creating a much larger and more profitable company than Outbrain alone. Something would have to go terribly wrong for the reshaped Outbrain to stop it from having a market cap of $1.6 billion by 2029.