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Is Backblaze the Next Momentum Monster?

Written by Jeffrey Neal Johnson

A staggering 64% single-day stock appreciation on more than 30 times the average trading volume is rarely a quiet event. For storage cloud platform Backblaze, Inc. (NASDAQ: BLZE), the explosive move following its first-quarter earnings report signals more than just a momentary triumph; it points to a fundamental re-rating by the market.

Institutional capital appears to be aggressively targeting Backblaze’s deep structural cost advantage and its pivotal role in the artificial intelligence (AI)infrastructure landscape. The company is fueled by a triad of catalysts: exponential data growth from multimodal AI, a revamped go-to-market (GTM) engine, and a clear line of sight to free cash flow positivity. Driven by these catalysts, Backblaze is methodically stripping market share from incumbent hyperscalers. For investors, understanding this dynamic is key to navigating Backblaze’s next phase.

Backblaze’s Strategic Neocloud Advantage

The primary driver behind this re-evaluation is Backblaze’s positioning as a critical infrastructure partner for the emerging Neocloud market. As severe supply chain constraints on GPUs and high-performance memory hamstring legacy hyperscalers, AI developers are increasingly turning to a decentralized ecosystem of specialized cloud providers for compute resources. This macro-headwind for giants like Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) has become a powerful tailwind for Backblaze.

AI workloads, particularly in the training phase of large language and diffusion models, generate massive, bursty data transfers. Developers require an open, low-cost data lake that can store petabytes of data and rapidly deploy it to any Neocloud platform with GPU capacity. Backblaze has become this mission-critical data layer.

Backblaze’s traction in this segment is accelerating. In Q1, the AI customer count surged 76% year-over-year (YOY), driven by two new generative AI contracts totaling $1.5 million in annual contract value. Management now estimates its total addressable market within the Neocloud data lake tier alone will reach $14 billion by 2030, a substantial runway for growth. Backblaze is actively building for this demand, replacing 100-gigabit network links with 400-gigabit connections to handle the elephant flows characteristic of AI model training.

From Consumer Backup to Enterprise Beast

Historically perceived as a consumer-focused backup service, Backblaze has undergone a significant GTM transformation to attack the enterprise and AI opportunity. A key move was the recent appointment of Anuj Kumar as Chief Revenue Officer. Kumar brings a wealth of experience scaling enterprise cloud infrastructure sales from his time at industry heavyweights such as NetApp, Inc. (NASDAQ: NTAP), VMware, and Red Hat.

This new leadership is institutionalizing a more disciplined and aggressive sales motion. Initiatives like the Flamethrower startup program and a new partnership with Andreessen Horowitz’s founder resource program are systematically embedding Backblaze within the venture-backed tech ecosystem. This proactive approach is designed to capture high-growth companies early in their lifecycle, a strategy already bearing fruit with a 72% YOY growth in customers generating over $50,000 in annual recurring revenue (ARR). The total company ARR now stands at $158.2 million, up 13% YOY, with the core B2 Cloud Storage segment’s ARR growing at a robust 28% clip.

How Backblaze’s Economics Are Disrupting the Cloud Giants

Backblaze’s foundational appeal is its disruptive unit economics. Following a pricing and packaging overhaul effective May 1, 2026, Backblaze’s B2 Cloud Storage is priced at a fraction of what its larger competitors charge. While hyperscalers can charge upwards of $20 per terabyte per month and levy significant data egress fees, Backblaze offers a simplified, more predictable model. This structure eliminates API transaction fees and provides generous free egress, a critical factor for AI companies that must constantly move large datasets between storage and compute environments without incurring punitive costs.

This competitive advantage is now translating into expanding operating leverage. Q1 results showcased this inflection.

• Revenue: $38.7 million, beating consensus estimates and representing 12% YOY growth.
• B2 Cloud Storage Revenue: Grew 24% YOY, becoming the clear engine of the business.
• Adjusted EBITDA: Reached $10.1 million, for a 26% margin, a healthy expansion from the 18% margin reported in Q1 2025.
• B2 Net Revenue Retention (NRR): A solid 110%, demonstrating strong expansion within its existing customer base.

Crucially, management provided clear guidance for a pivotal financial milestone. Despite pulling forward capital expenditures from 2027 into 2026 to meet surging demand, Backblaze projects it will achieve positive adjusted free cash flow in the second half of the year. This transition to self-funded growth significantly de-risks the investment narrative and signals a new phase of financial maturity.

Trading the Afterburn: Charting the Next Move for Backblaze

The 64% surge in Backblaze, Inc.’s stock price was not an anomaly but a market acknowledgment of a rapidly strengthening fundamental story. With powerful AI tailwinds, a maturing enterprise sales organization, and a clear trajectory toward sustained profitability, Backblaze appears well-positioned to continue its assault on the cloud storage market.

However, a single-day move of this magnitude introduces significant near-term volatility. Prudent investors might consider the technical landscape. Rather than chasing the initial explosive candle, a more disciplined approach may be to watch for the stock to consolidate its gains, potentially forming a multi-day or multi-week flag pattern. Such a consolidation would allow the market to digest the new information and could provide a more structured entry point for those looking to capitalize on Backblaze’s long-term growth thesis. READ THIS STORY ONLINE

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The AI Fear Around Datadog Stock May Have Been Completely Wrong

Written by Thomas Hughes

Datadog (NASDAQ: DDOG) is a great example of why investing based on emotion, contrary to fundamentals, is such a bad idea. Fear of a Software-as-a-Service (SaaS) AI disruptionhelped to drive Datadog stock to long-term lows, despite its bullish fundamentals. Now, Datadog is not only still outperforming, but the SaaS fears seem to have been completely misplaced. AI isn’t disrupting business for this and other software-specific companies; it’s accelerating it, and the runway for growth remains robust. Agentic AI is now the name of the game, and it is in its earliest phases of adoption.

Datadog Is Barking Up the Right Tree in Q1

Datadog’s Q1 2026 earnings resultsprove that it has been barking up the right tree. The company’s revenue growth accelerated to over 32%, outpacing the consensus estimate by more than 500 basis points (bps), producing the first-ever billion-dollar quarter. 

Growth was driven by new clients, with large contributors increasing by 21% and compounded by service penetration. New products are also a driver, including AI and datacenter-specific tools aimed at easing deployments, management, and security outcomes.

Margin was another area of strength. The revenue surge and operational quality produced significant margin improvement, with net income more than doubling on a GAAP basis, and adjusted operating income growing by 34%. 

More importantly, adjusted income outpaced the consensus by more than 1,750 bps, and earnings strength is expected to continue in the upcoming quarters.

DDOG stock shot up by 30% in premarket trading following earnings, largely due to management’s forward guidance. Business momentum led management to increase guidance for Q2 and the year, indicating strengths will persist. 

Agentic AI is expected to accelerate over the coming quarters, as data center capacity improves, models are trained, and inference gains traction. In this scenario, Datadog’s growth may accelerate over the coming years, setting the stage for a sustained bullish revision cycle across revenue, earnings, and price targets. As it stands, DDOG trades at less than 15X its 10-year earnings forecast, suggesting a 50% upside is possible, relative to its critical resistance, the all-time high set in 2021.

Analysts Respond With Cautious Optimism

Analysts were cautious with their response but are optimistic about Datadog’s future. They cited the strong revenue growth and guidance, along with the latest FedRAMP certification, which promises to drive growth in both public and private business. The FedRAMP High authorization is among the highest designations for government cloud providers, enabling the security of sensitive but not classified documents. The move affirms Datadog’s utility, opening the door to a wider range of government business, while providing visible reassurance to commercial business and investors.

As it stands, the consensus price target suggests DDOG is fairly valued near the high-end of its trading range, but recent analyst revisions are more bullish. They put DDOG above the $200 market and at a fresh all-time high. 

This is significant as a move to fresh all-time highs would break DDOG stock out of a trading range and brings aggressive targets into play. In this scenario, DDOG could experience a dynamic shift in which price headwinds become tailwinds, amplifying upside potential. The base case would be a move equal to the trading range, setting the long-term target at approximately $220, potentially reached within 12 to 18 months of the fresh high.

Institutions are a risk. The group owns a substantial 80% of the shares and has been distributing on a trailing 12-month basis. They run a high $2.5-to-$1 balance and will likely sell into the rally, given the rapid 30% stock price increase and the potential to take profits. Early price action reflects resistance at the critical level and an uncertain market, so how much institutions sell is critical. Assuming the guidance update is sufficient to invigorate a more bullish posture, DDOG should move to fresh highs quickly; if not, investors should prepare for a price correction, potentially closing the gap that formed upon the release, before any fresh high is reached.

Datadog Balance Sheet Is a Reason to Own This Stock

Datadog’s balance sheet reflects the business quality and strength, with cash and assets rising, outpacing the increase in liabilities, and equity following suit. The critical takeaways include $4.8 billion in cash and marketable assets, low total leverage, with equity nearly doubling total liabilities, and a net cash position. The company is in a fortress-like position, capable of executing strategy and on track to initiate capital returns within the next few years. The biggest risk for DDOG stock is persistently high near-term valuations, but the company continues to prove its worth. READ THIS STORY ONLINE

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3 REITs to Watch as AI Data Center Spending Surpasses Office Construction

Written by Jessica Mitacek

The proliferation of artificial intelligence (AI) has resulted in abundant market opportunities.

From NVIDIA (NASDAQ: NVDA) to Micron Technology (NASDAQ: MU), AI stocks have shown their ability to not just outperform the market, but to do so by leaps and bounds.

While pure-play AI stocks’ performances and record Magnificent Seven CapEx allocations have provided a glimpse into this megatrend, one remarkable feat demonstrates just how impactful AI growth has become.

The AI-driven acceleration of data center construction has resulted in spending that now surpasses the total spending on office building construction. This presents a unique opportunity tailored for income investors who are looking for yield and AI growth exposure—something that each of the following three real estate investment trusts(REITs) provides.

Data Center Spending Surges as Office Construction Lags

Alongside AI and cloud computing demand, data center construction reached a record annualized rate of $45 billion in December 2025. For the first time ever, that figure exceeded private office construction, which fell to $44 billion.

While that landmark accomplishment was years in the making, demand for data centers is unlikely to abate. Industry consultancy firm Grand View Research forecasts the global data center market—estimated at $383.82 billion in 2025—to reach $902.19 billion by 2033, implying a compound annual growth rate (CAGR) of 11.3% from 2026 to 2033.

The North America data center segment alone, which accounts for more than 38% of the global total addressable market, is projected to grow at a CAGR of 10.5% during the forecast period. By comparison, the office building construction market is expected to undergo a CAGR of 8.5% through 2033, suggesting that this disparity is just getting started.

A Mountain of Potential From a Legacy Data Manager

Founded in 1951, Iron Mountain (NYSE: IRM) converted to a REIT in 2014.

As it expanded from legacy records management company to colocation data center operator, the 75-year-old company has amassed 240,000 customers spanning 61 countries, including 95% of Fortune 1000 members.

The REIT continues to help organizations unlock value through services, including information management, digital transformation, information security, and data center/asset lifecycle management needs.

While REITs are known for generating yield, Iron Mountain is the quintessential example of how a data center REIT can simultaneously offer strong dividends and growth. Over the past month, shares have gained nearly 28%, contributing to a year-to-date (YTD) gain of more than 60%.

Meanwhile, the trust’s dividend currently yields 2.67%, or $3.46 per share annually, with an annualized five-year growth rate of 5.45%.

Big Tech’s Big Data Center Partner

Digital Realty Trust (NYSE: DLR) is a REIT that owns, acquires, and operates carrier-neutral data centers and provides colocation and interconnection services.

Its focus is on large-scale, mission-critical facilities that support the physical infrastructure needs of cloud providers, enterprises, network operators, and content companies.

That has resulted in partnerships with exceptionally large tech companies, including NVIDIA, Oracle (NYSE: ORCL), Dell Technologies (NYSE: DELL), and Advanced Micro Devices (NASDAQ: AMD), as Digital Realty has become synonymous with wholesale data center space, turnkey facilities, and retail colocation suites.

The REIT hosts NVIDIA’s AI Factory Research Center in Northern Virginia and has partnered with Advanced Micro Devices on the Digital Realty Data Center Innovation Lab—a so-called AI sandbox, “hands-on facility where partners, enterprises, and customers can test and prove AI deployments in a real colocation environment,” according to the company.

Shares of DLR have seen a YTD gain of more than 29%, and its dividend currently yields 2.5%, or $4.88 per share annually.

The World’s Largest Data Center REIT

With a market cap of nearly $108 billion, Equinix (NASDAQ: EQIX) is the world’s largest data center REIT.

After converting to a trust on Jan. 1, 2015, it provides digital infrastructure and interconnection services, while specializing in carrier-neutral data centers and colocation.

Like Digital Realty, Equinix operates a platform that enables enterprises, cloud and network service providers, and content companies to colocate IT infrastructure, interconnect directly with partners and providers, and access cloud on-ramps and network services in a secure, low-latency environment.

Today, the REIT boasts more than 280 data center locations on six continents. Its data center operations serve customers that range from large multinational enterprises to cloud providers and telecommunications operators. Equinix emphasizes interconnection density and ecosystem partnerships as differentiators in enabling digital transformation and low-latency connectivity.

Shares of EQIX are up more than 43% this year, and the REIT’s dividend currently yields 1.92%, or $20.64 per share annually. That yield may be lower than the other two REITs on this list, but Equinix has increased its distribution for 10 years consecutively, while its annualized five-year growth rate of 12.01% surpasses both Iron Mountain and Digital Realty. READ THIS STORY ONLINE

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