BlackBerry (NYSE: BB) is reportedly in talks to buy Cylance, which utilizes artificial intelligence (AI) and machine learning technologies to enhance its IT security services. Cylance’s  technologies, top-notch workforce, and connections to the U.S. government should help BB win more huge IT security deals, thereby improving BlackBerry’s results and boosting BlackBerry stock.

Cylance Effectively Uses AI

SE Labs, an independent organization which assesses IT security products, noted in March 2018 that Cylance’s CylancePROTECT product “contains technology designed to identify and block malware using what it claims to be an ‘artificial intelligence’ (AI) model.”

According to SE Labs , a May 2015 version of CylanceProtect was able to effectively defend against threats that did not emerge until 11-33 months after May 2015. In other words, the product was able to use AI “to [recognize] and protect against threats that would not appear in real life for up to two years and nine months into the future.”  The organization noted that “a common criticism of computer security products is that they can only protect against known threats.”

Moreover, Cylance earned a “Recommended” rating and a very high score after its products were tested by NSS Labs.

A company with products that can defend against attacks which don’t currently exist would seem to be very valuable to enterprises. And there is a great deal of data that indicates Cytlance’s products are considered very desirable. Among the enterprises that have signed deals with Cylance are VMWare (NYSE: VMW), USO,KPMG, and Fujitsu — and that’s just in 2018.

Additionally, in June, the company raised $120 million “led by funds managed by Blackstone,” according to Cylance. Finally, Cylance last month announced that it had been named to Forbes’ list of the top 100 global private cloud companies.

Cylance’s effective use of AI and its appeal to large enterprises would definitely help BlackBerry land more deals, meaningfully boosting BlackBerry’s results and BlackBerry stock. Additionally, BlackBerry would be able to easily cross-sell its products to enterprises that have adopted Cylance’s systems, further improving its top and bottom lines and giving BlackBerry stock another positive catalyst.

Cylance Would Enhance BlackBerry’s Chances of Landing Government Deals

It turns out that the government is a big fan of using AI to enhance cybersecurity. In August, The New York Times reported that Defense Secretary James Mattis had written a memo to President Trump emphasizing the importance of AI.  And, in March 2017, CIO Magazine quoted Phyllis Schneck, a former deputy at the department of Homeland Security who dealt with cybersecurity, as saying that she thought the government should develop a large “pool of threat data” that would be automatically analyzed. That sounds a lot like AI.

Finally, in April 2017, Nasdaq reported that the Pentagon was spending $1.6 billion on unifying its firewalls in order ” to enable effective integration of artificial intelligence capabilities.”

Since the Pentagon is such a big fan of using AI to enhance cybersecurity, acquiring Cylance would put BlackBerry, which already has great IT security bona fides, in good position to provide IT security services to the winner of the Pentagon’s ten-year, $10 billion cloud contract known as Joint Enterprise Defense Infrastructure, or JEDI. If either Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ: AMZN), seen as the top contenders for the contract, win the deal, BlackBerry could provide IT security for the project. Of course, given the fact that the market cap of BlackBerry stock is under $5 billion and the fact that the company would get tremendous prestige from such a deal, becoming a subcontractor for JEDI would be a huge positive catalyst for BB stock .

Furthermore, Cylance has an important connection at DHS, as its Chief Product Officer, Eric Cornelius, was a “deputy director and chief technical analyst with the Department of Homeland Security’s Control Systems Security Program,” according to Reuters. By acquiring Cylance, BB would also get Cornelius’ valuable connections with the U.S. government. Finally, if the U.S. government is intensely interested in using AI for cybersecurity, other governments likely have the same viewpoint. So, adding Cylance would enable BlackBerry to win many more deals with foreign countries.

Cylance’s Revenue and BlackBerry Stock

Cylance has reportedly said that its top line came in at $100 million in 2017 and that its revenue jumped 177% year over year.  BlackBerry’s revenue was just $882 million over the last 12 months. One of the main complaints about BB stock has been the fact that its revenue has been falling as its legacy businesses shrink. If Cylance’s 2019 revenue comes in at $200 million, it would likely provide a boost of around 20% to BlackBerry’s top line and ensure that BlackBerry’s revenue rises significantly, eliminating one of Wall Street’s chief complaints about BlackBerry stock.

BlackBerry stock has many positive, powerful catalysts, including the proliferation of driverless cars and rapidly increasing demand for cybersecurity. Investors should definitely buy BB stock at current levels.

As of this writing, Larry Ramer owned shares of BB stock.