Key Highlights
- Shares of Backblaze rallied 44% to reach $11.70 following the announcement of a five-year, $335 million storage agreement with CoreWeave
- The partnership calls for delivering multi-exabyte HDD-based storage infrastructure to power CoreWeave’s artificial intelligence operations
- This single agreement represents more than four times Backblaze’s entire 2025 cloud storage revenue of $79.9 million
- Following the announcement, two Wall Street firms upgraded their ratings — Craig-Hallum established a $16 target, while Citizens increased its target to $14
- Year-to-date, BLZE has climbed approximately 150%, significantly outpacing the Russell 3000’s 7.2% gain during the same timeframe
Tuesday proved to be an exceptional trading session for Backblaze shareholders, with the stock surging 44% to close at $11.70 after unveiling a substantial storage partnership with AI infrastructure provider CoreWeave.
The five-year partnership agreement stipulates that CoreWeave will compensate Backblaze $335 million to secure multi-exabyte storage capabilities for its artificial intelligence processing needs. According to the arrangement, CoreWeave manages the hardware infrastructure and capacity planning, while Backblaze oversees the storage software platform and day-to-day operations.
For perspective on the magnitude of this agreement: Backblaze generated only $79.9 million in cloud storage revenue throughout the entire 2025 fiscal year. This single contract represents nearly four times that annual figure.
Interestingly, Tuesday’s remarkable 44% gain wasn’t even the stock’s strongest performance this year. On May 5, BLZE experienced an even more dramatic 64% surge following the release of impressive first-quarter results and robust annual recurring revenue expansion.
The company’s Q1 2026 financial results significantly exceeded Wall Street’s projections. Backblaze delivered earnings per share of $0.04, compared to consensus estimates calling for a loss of $0.0043, while revenue of $38.7 million surpassed the anticipated $37.79 million.
Wall Street Responds with Upgrades and Higher Targets
The CoreWeave partnership announcement sparked immediate reactions from multiple analyst firms. William Blair’s Jason Ader elevated Backblaze to Market Perform from Underperform — reversing a downgrade made just months earlier — describing the agreement as “meaningful validation” of Backblaze’s strategic positioning as a fundamental HDD-based storage solution for AI infrastructure requirements.
Craig-Hallum took an even more bullish stance, upgrading shares to Buy from Hold while establishing a $16 price target.
Citizens similarly increased its price objective to $14 from $8, while reaffirming its Market Outperform rating. Analyst Rustam Kanga highlighted the CoreWeave partnership as strong confirmation of Backblaze’s strategic positioning in AI storage for neocloud platforms seeking external storage solutions.
CoreWeave VP Nick Hoover praised Backblaze for establishing a “reputation for making complex, HDD-based storage infrastructure reliable and easy-to-consume at scale.”
Hard Disk Drives Secure Strategic Role in AI Infrastructure
Backblaze’s storage platform relies on traditional hard disk drives — more economical than flash storage but offering slower performance. This characteristic was previously viewed as a competitive disadvantage. However, this major agreement demonstrates that HDD-based storage maintains significant value within AI data center ecosystems.
Not all storage sector companies benefited on Tuesday, however. 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 a strong second-quarter performance.
CoreWeave shares also declined 5% during the session, illustrating the market dynamic where one party’s gain often comes at the expense of the other.
BLZE has appreciated approximately 150.2% since the beginning of the year. The stock is currently trading close to its 52-week peak of $11.85, with a market capitalization of $699.77 million. According to InvestingPro analysis, the stock appears overvalued when compared to its Fair Value assessment.
Citizens maintains a separate $180 price target on CoreWeave alongside its Market Outperform rating.
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