By Nate Wolf

On an otherwise bleak day for the artificial-intelligence trade, shares of cloud-storage platform Backblaze surged after the company won a game-changing contract.

AI infrastructure company CoreWeave will pay Backblaze $335 million over five years for storage capacity to support AI workloads, the companies announced Tuesday. Under the agreement, CoreWeave will provide hardware and capacity, while Backblaze provides the storage software and operations.

Backblaze stock spiked 44% to $11.70. That is only the stock's second-best day this year: It jumped 64% on May 5, when Backblaze posted solid growth in quarterly earnings and annual recurring revenue. Shares of CoreWeave fell 5% on Tuesday.

With AI both ingesting and producing seemingly endless volumes of data, demand for storage solutions has exploded over the past year. Backblaze has tried to tap into that demand, and now appears to be making inroads.

The $335 million deal represents an eye-popping sum for a company that posted just $79.9 million in cloud storage revenue in 2025.

"We believe this win provides meaningful validation of Backblaze's positioning as a core hard-disk-drive -- based (HDD-based) storage layer for AI infrastructure," wrote William Blair analyst Jason Ader in a research note Tuesday.

Ader upgraded Backblaze shares to Market Perform from Underperform -- just a few months after downgrading the stock.

Backblaze's platform runs on HDDs, a type of storage that is significantly cheaper than flash memory, but doesn't transfer data as quickly. The CoreWeave deal, Ader argued, is evidence that HDD-based infrastructure can continue to play a significant role at AI data centers.

Tuesday wasn't as kind to the actual hard-drive makers Western Digital and Seagate Technology. The stocks fell 8.1% and 4.9%, respectively, as investors sold off hardware names following a historic run over the second quarter.

Write to Nate Wolf at nate.wolf@barrons.com

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June 23, 2026 16:03 ET (20:03 GMT)

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