Key Highlights
- Shares of Backblaze surged 44% to reach $11.70 following the announcement of a massive $335 million storage partnership with CoreWeave spanning five years
- The agreement centers on delivering multi-exabyte HDD-based storage infrastructure to power CoreWeave’s artificial intelligence operations
- This single contract is worth more than four times Backblaze’s entire 2025 cloud storage revenue of $79.9 million
- Following the announcement, Craig-Hallum upgraded BLZE with a $16 price target while Citizens boosted its forecast to $14
- Year-to-date performance shows BLZE climbing approximately 150%, significantly outpacing the Russell 3000’s 7.2% gain during the same timeframe
Investors in Backblaze experienced an exceptional trading session on Tuesday as shares skyrocketed 44% to $11.70, driven by news of a landmark storage partnership with CoreWeave, a leading AI infrastructure provider.
The five-year partnership arrangement calls for CoreWeave to commit $335 million to Backblaze in exchange for multi-exabyte storage capacity designed to support demanding AI workloads. The structure divides responsibilities with CoreWeave managing hardware and capacity requirements while Backblaze handles storage software management and operational oversight.
The magnitude of this deal becomes striking when compared against Backblaze’s performance metrics: the company generated only $79.9 million in cloud storage revenue throughout 2025. This single agreement represents nearly quadruple that annual figure.
Interestingly, Tuesday’s impressive 44% rally wasn’t even BLZE’s strongest performance this year. The stock experienced an even more dramatic 64% surge on May 5 following the release of robust Q1 earnings results and strong annual recurring revenue expansion.
The first quarter of fiscal 2026 delivered results that substantially exceeded Wall Street projections. Backblaze posted earnings per share of $0.04, a significant beat against analyst expectations of a $0.0043 loss, while revenue reached $38.7 million, surpassing the consensus estimate of $37.79 million.
Wall Street Responds with Upgrades and Higher Targets
The CoreWeave partnership sparked immediate reactions across the analyst community. William Blair’s Jason Ader revised his stance on Backblaze to Market Perform from Underperform — reversing a downgrade made just months earlier — characterizing the agreement as “meaningful validation” of the company’s strategic position as a fundamental HDD-based storage solution for AI infrastructure requirements.
Craig-Hallum adopted an even more bullish position, elevating its rating to Buy from Hold while establishing a $16 price objective.
Citizens similarly increased its price forecast to $14 from $8 while keeping its Market Outperform stance. Analyst Rustam Kanga highlighted how the CoreWeave partnership validates Backblaze’s strategic positioning within AI storage solutions for neocloud operators seeking third-party storage partnerships.
Nick Hoover, Vice President at CoreWeave, praised Backblaze for establishing a “reputation for making complex, HDD-based storage infrastructure reliable and easy-to-consume at scale.”
Hard Disk Drives Prove Valuable in AI Era
Backblaze’s infrastructure relies on hard disk drive technology — a more economical alternative to flash memory, though with slower performance characteristics. This was previously viewed as a competitive disadvantage. However, this partnership demonstrates that HDD storage maintains significant relevance within AI data center environments.
Not all storage-related equities benefited from Tuesday’s developments. Traditional hard-drive manufacturers Western Digital and Seagate experienced declines of 8.1% and 4.9% respectively, as market participants shifted away from hardware stocks following their strong second-quarter performance.
CoreWeave’s shares dropped 5% during the session, illustrating how deal announcements can create divergent outcomes for the parties involved.
BLZE has gained roughly 150.2% since the beginning of the year. Trading activity has pushed the stock close to its 52-week peak of $11.85, bringing market capitalization to $699.77 million. According to InvestingPro analysis, the stock currently trades above its calculated Fair Value, suggesting potential overvaluation.
Citizens maintains a separate $180 price target on CoreWeave shares with a Market Outperform rating.
