What happened

Shares of BlackBerry (NYSE:BB) soared 112.8% in January according to data from S&P Global Market Intelligence. The technology company's stock benefited from excitement surrounding short squeezes after incredible gains for GameStop stock kicked off a scramble to find other similar opportunities. 

By buying up shares of the video game retailer's stock, investors coordinating on internet message boards triggered a short squeeze and powered incredible valuation gains. BlackBerry also had relatively high short interest, and investors started piling into its stock. 

A bull figurine towering over a bear figurine.

Image source: Getty Images.

So what

BlackBerry has moved away from its phone hardware business and is now focused on cybersecurity software and Internet of Things solutions. However, the company's growth initiatives haven't been fairing that well, and a bullish fundamentals-based case on the stock involves some speculation that the business will get traction with new contracts.

Despite strong growth trends for Internet of Things and cybersecurity services, the company has been losing market share, and its overall revenue dipped 18% year over year last quarter. Lackluster business performance invited sizable short positions, and that made BlackBerry a target destination for investors seeking stocks that could potentially be the next GameStop. The push helped BlackBerry's share price more than double last month, but it probably won't match the video game retailer's incredible gains. 

Now what

BlackBerry stock has continued to climb early in February's trading. The company's share price is up roughly 1.8% in the month so far. 

BB Chart

BB data by YCharts

Incredible performance for GameStop stock (which is now up roughly 1,090% even after a recent pullback) and BlackBerry's own recent surge highlight the potential for explosive short-squeeze-driven returns amid volatile market conditions.

However, investors should be wary of going all-in on this strategy. It may still be possible to record some big gains with this approach, but there's also a good chance people attempting to get in at this stage will get burned. 

BlackBerry now has a market capitalization of roughly $8.2 billion and is valued at approximately 8.7 times this year's expected sales.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.