Key Highlights
- Shares of Backblaze climbed 44% to reach $11.70 following the announcement of a five-year, $335 million storage agreement with CoreWeave
- The partnership will deliver multi-exabyte HDD-based storage infrastructure designed to power CoreWeave’s artificial intelligence operations
- This single contract value exceeds Backblaze’s entire 2025 cloud storage revenue by more than four times ($79.9 million)
- Analysts from Craig-Hallum and Citizens JMP upgraded their ratings ā Craig-Hallum established a $16 target while Citizens moved to $14
- Year-to-date performance shows BLZE climbing approximately 150%, significantly outpacing the Russell 3000’s 7.2% gain
Tuesday proved to be an extraordinary trading session for Backblaze shareholders, with the stock skyrocketing 44% to close at $11.70 following news of a landmark partnership with artificial intelligence infrastructure provider CoreWeave.
The newly announced five-year arrangement will see CoreWeave commit $335 million to Backblaze for delivering multi-exabyte storage infrastructure tailored for AI-intensive workloads. The structure has CoreWeave managing hardware deployment and capacity planning, while Backblaze operates the storage platform and handles day-to-day operations.
The magnitude of this agreement becomes striking when compared to Backblaze’s recent financial performance: the company generated only $79.9 million in cloud storage revenue throughout 2025. This single contract represents nearly quadruple that annual figure.
Interestingly, Tuesday’s dramatic 44% rally wasn’t even the stock’s strongest showing this year. On May 5, BLZE experienced an even more impressive 64% surge after delivering impressive first-quarter results accompanied by robust annual recurring revenue expansion.
The company’s Q1 2026 financial performance substantially exceeded Wall Street projections. Backblaze delivered earnings per share of $0.04, contrasting sharply with analyst expectations of a $0.0043 loss, while revenue reached $38.7 million versus the consensus estimate of $37.79 million.
Wall Street Analysts Revise Outlook Upward
The CoreWeave partnership prompted swift action from the analyst community. William Blair’s Jason Ader reversed his previous stance, elevating Backblaze from Underperform to Market Perform ā a notable reversal just months after downgrading the name. Ader characterized the agreement as “meaningful validation” that Backblaze has successfully established itself as an essential HDD-based storage foundation for AI infrastructure deployments.
Craig-Hallum adopted an even more bullish position, upgrading shares to Buy from Hold while establishing a $16 price objective.
Citizens analyst Rustam Kanga also increased his firm’s price target significantly, moving from $8 to $14 while reaffirming a Market Outperform stance. Kanga highlighted the CoreWeave agreement as proof that Backblaze has carved out a strategic position as an AI storage provider for next-generation cloud operators seeking external storage partnerships.
CoreWeave’s VP Nick Hoover praised Backblaze for cultivating a “reputation for making complex, HDD-based storage infrastructure reliable and easy-to-consume at scale.”
Traditional Hard Drives Prove Relevant for AI Workloads
Backblaze’s technology stack relies on traditional hard disk drives rather than flash memory ā an approach that offers significant cost advantages despite slower performance characteristics. This architecture had previously been viewed skeptically by some market observers. However, this partnership demonstrates that HDD-based storage maintains strategic importance within modern AI data center environments.
The celebration wasn’t universal across the storage sector on Tuesday. Traditional hard drive manufacturers experienced selling pressure, with Western Digital declining 8.1% and Seagate dropping 4.9% as investors repositioned capital away from hardware providers following a robust second-quarter performance.
CoreWeave shares also retreated 5% during the session, illustrating how market participants often view large customer commitments as a mixed signal for the company making the financial commitment.
Backblaze has now appreciated roughly 150.2% since the beginning of the year. The stock trades close to its 52-week peak of $11.85, bringing its market capitalization to $699.77 million. According to InvestingPro analysis, shares currently appear elevated compared to Fair Value calculations.
Separately, Citizens maintains a $180 price objective on CoreWeave shares with a Market Outperform rating.
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