Backblaze Stock Jumps on Huge CoreWeave AI Deal. The Bull Case Is Getting Stronger.

Backblaze (BLZE) is suddenly looking like more than a quiet data storage name. The stock jumped 44% on Tuesday to $11.7 after the company signed a $335 million, five-year deal with CoreWeave (CRWV) to support AI storage demand. That is a huge number for a company that posted only $79.9 million in cloud-storage revenue in 2025, and it helps explain why traders rushed in so fast.

The bigger point is that Backblaze is getting pulled into the AI buildout differently than chipmakers or cloud giants. It is not selling raw compute. It is selling the storage layer that AI systems still need in large volumes. That gives the stock a fresh narrative, even if the business is still small and the move has already been violent.

A Small Company With a Much Bigger Opening

Backblaze is still a cloud-storage and backup company at heart, but the CoreWeave deal makes it look more relevant to AI infrastructure than most investors expected a few months ago. Barron’s said the contract helped validate Backblaze as a hard-disk-drive-based storage layer for AI workloads, and that matters because HDD storage is cheaper than flash, even if it moves data more slowly.

That deal matters as it gives Backblaze a way to win business without needing to act like a classic high-growth software name. It can lean into cost-efficient storage, long-duration contracts, and AI data retention. For a small-cap name, that is a useful angle.

Tuesday’s 44% jump was not a random squeeze. It followed a 64% pop on May 5, when Backblaze posted solid quarterly earnings and annual recurring revenue growth. The market clearly likes the direction of travel, but the stock has already climbed 136% in 2026, far enough that investors now need execution, not just excitement.

On a simple valuation lens, the CoreWeave contract is about 4.2 times Backblaze’s 2025 cloud-storage revenue of $79.9 million. That is not a stock multiple, but it does show how large the deal is relative to the company’s current scale. The setup looks less like a cheap stock and more like a small company getting priced for a much bigger future.

The Quarter That Set the Table

Tuesday’s spike was not built on one contract alone. Backblaze already had momentum after its first quarter. Revenue rose 12% to $38.7 million. B2 Cloud Storage grew 24% to $22.4 million, and ARR climbed 28% to 158 million. 

The company finished the quarter with 187 customers above 50,000 in ARR, up 51% from a year earlier. Gross margin improved to 61% from 56%, adjusted EBITDA reached $10 million, and adjusted free cash flow was negative $1.8 million.

Moreover, Backblaze has also been pushing its reliability pitch, and its 2025 hard-drive report showed an annualized failure rate of 1.36%, the best since 2022. At the same time, Backblaze flagged a storage shortage that helped push hard-drive prices up about 46% late last year, which only reinforces how tight this market still is.

That is important because it shows Backblaze is not just waiting for AI demand to arrive. It is trying to position itself as a practical storage layer while the market wrestles with supply, pricing and reliability issues. That kind of work is less flashy than a giant AI contract, but it helps support the story behind it.

What Analysts Think of BLZE Stock

The analyst crowd is still warming up to the name. William Blair’s Jason Ader upgraded BLZE stock to “Market Perform” from “Underperform” after the CoreWeave deal, saying the win validates Backblaze’s role in AI infrastructure and supports the case for HDD-based storage in data centers. Just three months earlier, the same firm had cut Backblaze to “Underperform,” which shows how quickly sentiment has flipped.

Overall, the consensus is “Moderate Buy” on Wall Street, but BLZE stock has not only crossed its mean target of $8.25 but is trading just above the street high target of $11, which suggests some downside risk.