• Backblaze, Inc. recently announced a multi-year agreement with CoreWeave valued at US$335 million to provide hard-disk-drive cloud storage for AI workloads.
• The CoreWeave partnership is expected to become a large contributor to Backblaze’s B2 business over time, reinforcing its AI-focused storage strategy.
• We’ll now examine how this sizable CoreWeave AI storage contract could reshape Backblaze’s investment narrative and future business profile.

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Backblaze Investment Narrative Recap

To own Backblaze, you need to believe B2 Cloud can offset pressure in the declining Computer Backup segment and eventually support a healthier overall business mix. The CoreWeave deal looks like the key near term catalyst, potentially lifting B2 scale and visibility, while also magnifying the biggest risk today: increasing dependence on a concentrated group of AI customers whose storage demand and provider choices could change quickly.

Among recent announcements, the launch of B2 Neo for neocloud platforms feels most connected to the CoreWeave news. Both point to Backblaze leaning into higher throughput, AI oriented storage use cases that support its B2 focus. If B2 Neo adoption progresses alongside the CoreWeave ramp, it could help Backblaze broaden its large customer base, which would matter if AI workloads or specific hyperscale-adjacent partners ever slow their demand.

Yet beneath the excitement around CoreWeave, investors should be aware that concentration in a few large AI customers and intense hyperscaler competition could...

Backblaze's narrative projects $201.4 million revenue and $15.7 million earnings by 2029. This requires 10.3% yearly revenue growth and a $38.1 million earnings increase from -$22.4 million today.

Uncover how Backblaze's forecasts yield a $9.34 fair value, a 48% downside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts already expected revenue to reach about US$212.8 million by 2028 and still saw regulation driven compliance costs as a key risk. The CoreWeave agreement could reinforce that bullish view or force a rethink, which is why you should weigh how much confidence you place in high growth forecasts that assume margins eventually normalize despite rising security and compliance demands.

Explore 6 other fair value estimates on Backblaze - why the stock might be worth as much as $15.90!

Form Your Own Verdict

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Backblaze research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free Backblaze research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Backblaze's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.