---
title: "Backblaze's AI traffic hit a record while the stock fell 32% to $8.63; Q3 report due November 2"
description: "The company's own Q3 Network Stats, published October 22 and covered by no outlet, shows AI demand reaching the network while the shares have fallen about a third in twelve days. The Q3 print on November 2, guided to $44.4-44.8 million, is the first reading that can show demand parking as revenue."
publisher: "The Inference"
section: "Data Center"
published: 2026-10-23T15:50:25.985Z
modified: 2026-10-23T15:50:25.985Z
canonical: https://theinference.org/article/backblaze-s-ai-traffic-hit-a-record-while-the-stock-fell-32-to-8-63-q3-report-due-november-2
language: en
keywords: "Backblaze, Cloud Storage, AI Infrastructure, Earnings, Stock Moves"
---

# Backblaze's AI traffic hit a record while the stock fell 32% to $8.63; Q3 report due November 2

> The company's own Q3 Network Stats, published October 22 and covered by no outlet, shows AI demand reaching the network while the shares have fallen about a third in twelve days. The Q3 print on November 2, guided to $44.4-44.8 million, is the first reading that can show demand parking as revenue.

[Backblaze](https://theinference.org/markets/companies/backblaze), the Nasdaq-listed budget storage company that now bills itself as the high-performance capacity storage layer for AI, set an all-time traffic record on its network in July, according to its own [Q3 Network Stats published on October 22](https://www.backblaze.com/blog/network-stats-q3-2026-higher-baselines-shifting-patterns/) [1]. The report shows content delivery network (CDN, the delivery layer that serves content to end users) traffic peaking in July and settling at a baseline significantly higher than the same time last year, neocloud (AI-focused GPU cloud provider) traffic expanding to record heights, and fresh migration bursts in July, August and September [1]. No outlet has covered the report; it reached the wider press only as a distribution abstract [2]. It is the last company document before third-quarter results land after the close on November 2 [3].

The stock that traffic is meant to carry has been moving the other way. Backblaze traded near $8.63 on October 23 [4], down about 32% from the $12.69 it fetched when [The Inference](https://theinference.com/article/backblaze-s-335-million-coreweave-contract-doesn-t-hit-its-minimums-until-mid-2027-stock-at-12-69) last wrote on the company, on October 11 [5].

It is also roughly half its August level: the stock closed at $16.88 on the day it priced an upsized $175 million convertible notes offering, August 19 [11]. The AI story had priced the shares up before. When first-quarter results beat forecasts, $0.04 of earnings per share on $38.7 million of revenue against expectations of roughly nil on $37.8 million, the stock traded 68% higher that day and retail sentiment ran "extremely bullish" [6]. The AI money named that day was small: two contracts, an AI training-data firm and a generative-video company, worth about $1.5 million of combined annual contract value (ACV, the yearly value of signed deals) [6].

*Chart: **A third of the stock's August value is gone in twelve days** Column chart of Backblaze's share price at three moments: $16.88 on August 19, $12.69 on October 11 and $8.63 on October 23.*

*Backblaze share price in dollars at three moments: the close on August 19, the day it priced an upsized $175 million convertible offering [11]; the October 11 price when The Inference last wrote on the company [5]; and the October 23 price [4]. [11][5][4]*

## What the traffic record can and cannot show

The complication is that traffic is not revenue. CDN delivery and one-time migrations are bytes passing through, billed as they move or not at all; storage revenue builds from bytes that park and accrue monthly. The Network Stats show demand reaching the network [1]. They cannot show whether it stays. Only [the Q3 print](https://www.businesswire.com/news/home/20261012529631/en/Backblaze-to-Announce-Third-Quarter-2026-Results-on-November-2-2026) can [3].

## The receipts cut both ways

The bull ledger is real. The [second-quarter print on August 3](https://finance.yahoo.com/quote/BLZE/earnings/BLZE-Q2-2026-earnings_call-660289.html) delivered revenue of $42.7 million, up 18% year over year and the strongest growth in six quarters, and raised the full-year guide to $172-174 million from $161.5-163.5 million [7]. [The $335 million CoreWeave pact](https://theinference.com/article/backblaze-s-335-million-coreweave-contract-doesn-t-hit-its-minimums-until-mid-2027-stock-at-12-69), the largest contract in company history and Backblaze's fourth major AI cloud customer, added about $313 million of contracted future revenue (RPO, remaining performance obligations) net of $22 million in warrant values [7].

Two documents already reported this month round it out: [the October 12 WEKA deal](https://chipdispatch.com/articles/backblaze-b2-becomes-cold-storage-tier-under-weka-neuralmesh-8bfca627) making B2 the cold-storage tier beneath NeuralMesh, [WEKA](https://theinference.org/markets/companies/weka)'s high-performance AI file system [8], and [SemiAnalysis's ClusterMAX 3.0 of October 20](https://www.marketscreener.com/news/neoclouds-your-storage-layer-just-got-a-public-grade-ce785cd8da89f021), in which the research firm gave medallion ratings to only 19 of 77 neoclouds tested [9]. After the Q1 beat, brokerage analysts turned bullish: Lake Street raised its target to $11 from $8, Needham to $8.5 from $6 [6].

## The bear ledger counts too

Backblaze's chief financial officer credited the May 1 price increase with about 8 points of B2's 34% growth, leaving core growth near 26% [7]. [CoreWeave](https://theinference.org/markets/companies/coreweave)'s contract minimums do not bite until mid-2027 [5][7], and the counterparty is wobbling: CoreWeave and [Nebius](https://theinference.org/markets/companies/nebius) plunged more than 25% this week amid AI financing fears [7].

Capital expenditure will run 55-65% of revenue this year, with a gross margin setback of a few hundred basis points while capacity is built ahead of revenue [7]; the [$175 million of 0.00% notes due 2031](https://markets.financialcontent.com/prnews/article/bizwire-2026-8-20-backblaze-announces-pricing-of-upsized-175-million-convertible-senior-notes-offering), convertible at about $21.94 a share, pre-funds it [11]. Wasabi, a rival storage firm, raised $70 million in January and arranged a $250 million credit facility for a dedicated AI storage unit [8].

*Chart: **Growth halved into Q1 2026, then re-accelerated in Q2** Bar chart of Backblaze quarterly year-over-year revenue growth from Q2 2024 to Q2 2026, falling from about 27% to 11.7% by Q1 2026 and rebounding to 17.7% in Q2 2026.*

*Quarterly revenue growth year over year, percent, from Backblaze SEC filings, Q2 2024 through Q2 2026, retrieved October 23, 2026. [10]*

## November 2 is the referee

Third-quarter results land after the market close on Monday November 2, with the call at 5:00 p.m [3][7]. ET [3], against revenue guidance of $44.4-44.8 million [7].

*Chart: **Revenue re-accelerated in Q2; the guide implies another step up** Column chart of Backblaze quarterly revenue from Q1 2024 through Q2 2026, rising from $29.97 million to $42.71 million, with Q3 2026 guided at $44.4 to $44.8 million.*

*Quarterly revenue in millions of dollars, from Backblaze's SEC filings via company_series, retrieved October 23, 2026 [12]; the Q3 2026 bar is the company's guidance of $44.4-44.8 million [7], not a reported figure. [12][7]*

Two lines settle the argument between the AI-platform bulls and the dollar-counting bears: whether B2 growth beats the 34% of Q2, or the 26% core growth excluding price [7], and whether the neocloud and CDN traffic of the Network Stats converts into stored, billable petabytes or stays bytes passing through [1]. The company walks through the traffic data in a webinar on October 29 [1]. Until the print, the stock at $8.63 is priced on bytes in motion [1].

## Takeaway

Record July traffic and an $8.63 stock meet on November 2: the question is whether AI bytes in motion become stored, billable petabytes.

## Sources

1. [Backblaze, Network Stats Q3 2026: Higher Baselines, Shifting Patterns, 22 October 2026](https://www.backblaze.com/blog/network-stats-q3-2026-higher-baselines-shifting-patterns/)
2. [MarketScreener, Backblaze: Network Stats Q3 2026, Higher Baselines, Shifting Patterns (distribution abstract), 22 October 2026](https://www.marketscreener.com/news/network-stats-q3-2026-higher-baselines-shifting-patterns-ce785cdedb8df523)
3. [Business Wire, Backblaze to Announce Third Quarter 2026 Results on November 2, 2026, 12 October 2026](https://www.businesswire.com/news/home/20261012529631/en/Backblaze-to-Announce-Third-Quarter-2026-Results-on-November-2-2026)
4. [Seeking Alpha, Backblaze: AI Contracts Strengthen The Growth, But Margins Face A Temporary Hit, 15 September 2026 (page includes live BLZE quote data, retrieved 23 October 2026)](https://seekingalpha.com/article/4946455-backblaze-ai-contracts-strengthen-the-growth-but-margins-face-a-temporary-hit)
5. [The Inference, Backblaze's $335 million CoreWeave contract doesn't hit its minimums until mid-2027; stock at $12.69, 11 October 2026](https://theinference.com/article/backblaze-s-335-million-coreweave-contract-doesn-t-hit-its-minimums-until-mid-2027-stock-at-12-69)
6. [Stocktwits, BLZE Stock Rips 68% Today: What Is The AI Buzz Boosting Backblaze?, collected 18 October 2026](https://stocktwits.com/news-articles/markets/equity/blze-stock-soaring-today-after-q1-beat-on-ai-buzz/cZQDG58Re94)
7. [Yahoo Finance, Backblaze, Inc. (BLZE) Q2 FY2026 earnings call transcript, 3 August 2026](https://finance.yahoo.com/quote/BLZE/earnings/BLZE-Q2-2026-earnings_call-660289.html)
8. [Chip Dispatch, Backblaze B2 Becomes Cold Storage Tier Under WEKA NeuralMesh, 12 October 2026](https://chipdispatch.com/articles/backblaze-b2-becomes-cold-storage-tier-under-weka-neuralmesh-8bfca627)
9. [MarketScreener, Backblaze: Neoclouds, Your Storage Layer Just Got a Public Grade, 20 October 2026](https://www.marketscreener.com/news/neoclouds-your-storage-layer-just-got-a-public-grade-ce785cd8da89f021)
10. [Backblaze, quarterly figures from its SEC filings, via company_series, retrieved 23 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001462056)
11. [Business Wire via FinancialContent, Backblaze Announces Pricing of Upsized $175 Million Convertible Senior Notes Offering, 19 August 2026](https://markets.financialcontent.com/prnews/article/bizwire-2026-8-20-backblaze-announces-pricing-of-upsized-175-million-convertible-senior-notes-offering)
12. [Backblaze, quarterly figures from its SEC filings, retrieved 23 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001462056)


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Backblaze's AI traffic hit a record while the stock fell 32% to $8.63; Q3 report due November 2 — The Inference. Canonical: https://theinference.org/article/backblaze-s-ai-traffic-hit-a-record-while-the-stock-fell-32-to-8-63-q3-report-due-november-2