This Cloud Storage Stock Is Up 68% Today — What’s Fueling The Rally?

• Backblaze stated that it is seeing growing traction with its AI customers, citing major contract wins.
• The company’s CEO, Gleg Budman, highlighted that Backblaze secured multiple contracts, one with an AI training data firm and another with a generative AI video creation company.
• Budman added that these two contracts jointly contributed about $1.5 million in annual contract value to the company.

Shares of Backblaze Inc. (BLZE) soared on Tuesday after the company’s first-quarter (Q1) results beat Wall Street expectations.

Backblaze reported earnings per share (EPS) of $0.04 on revenue of $38.7 million, while Wall Street analysts expected the company to report nil earnings on revenue of $37.8 million, according to Fiscal.ai data.

Backblaze shares traded 68% higher in Tuesday’s opening trade.

AI Powers BLZE Earnings

Backblaze stated that it is seeing growing traction with its AI customers, citing major contract wins.

The company’s CEO, Gleg Budman, highlighted that Backblaze secured multiple contracts, one with an AI training data company and another with a generative AI video creation company. Budman added that these two contracts jointly contributed about $1.5 million in annual contract value to the company.

Budman also noted that AI customer growth was 76% year over year.

“As AI models shift from text to multimodal, the volume of data required to train and operate them grows exponentially, and the need for storage that is performant, open, and cost-efficient at scale has never been greater,” he said, adding that the company is emerging as a compelling storage platform of choice in the AI segment.

BLZE Revenue Gets A Cloud Boost

Backblaze, which offers cloud backup services for customers’ personal computers, reported a 24% year-on-year increase in its B2 Cloud storage segment.

The company also stated that its annual recurring revenue from large customers grew 72% YoY, with the number of customers generating more than $50,000 in ARR soaring 51% during the quarter compared to the year-ago period.

For the second quarter (Q2), Backblaze expects revenue in the $39.8 million to $40.2 million range. It raised its full-year 2026 outlook, expecting revenue to be between $161.5 million and $163.5 million, up from $156.5 million to $158.5 million.

Wall Street Turns Bullish On BLZE

According to TheFly, analysts at Lake Street hiked their price target for BLZE to $11 from $8 following the Q1 results, while keeping a ‘Buy’ rating on the stock.

The firm cited the full-year 2026 revenue forecast increase as the reason for the price target hike, while stating that it now models a return to double-digit revenue growth for Backblaze.

Analysts at Needham also hiked their price target for Backblaze, increasing it to $8.5 from $6, while keeping a ‘Buy’ rating on the stock.

What Do Retail Traders Think Of BLZE?

Retail sentiment on Stocktwits around Backblaze trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels.

BLZE stock is up 66% year-to-date and 68% over the past 12 months. The iShares Russell 2000 Growth ETF (IWO) is up 41% over the past 12 months, while the iShares Micro-Cap ETF (IWC) is up 62%.

Also See: FISV Stock Tumbles Pre-Market — Why Are Investors Disappointed?

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