Backblaze (BLZE) Surges 24.8% on Earnings Beat and Share Buyback Sparking Bullish Momentum

Summary
• Backblaze’s Q2 2025 earnings beat estimates by 120% on non-GAAP EPS of $0.01 vs. expected loss of $0.18
• $10 million share repurchase program announced, funded by employee option exercises and ESPP proceeds
• B2 Cloud Storage revenue grew 29% YoY, accelerating from 23% in Q1
• Intraday price surged from $5.63 to $6.71, a 24.8% rally, as bulls capitalize on improved margins and AI-driven growth signals. This explosive move reflects a rare confluence of earnings optimism, cost efficiency validation, and strategic capital return, positioning BLZE as a high-conviction play in the AI storage sector.

Earnings Beat and Buyback Fuel Short-Term Rally
Backblaze’s 24.8% intraday surge stems from a triple catalyst: (1) a 120% earnings surprise with non-GAAP EPS of $0.01 vs. expected loss of $0.18, (2) a $10 million share repurchase program funded by employee option proceeds, and (3) 29% YoY B2 Cloud Storage revenue growth. The buyback signals management confidence in undervaluation, while the AI-driven customer wins (e.g., multi-million-dollar ARR deal) validate long-term growth. Short-term bulls are betting on continued margin expansion, as adjusted EBITDA rose to 18% from 9% in Q2 2024.

Software Sector Mixed as Microsoft (MSFT) Gains 0.13%
Options Playbook: Capitalizing on BLZE’s Volatility and Gamma-Driven Moves
• Technical Indicators: 200-day MA at $5.89 (above current price), RSI at 52.5 (neutral), MACD -0.0385 (bearish but flattening), Bollinger Bands (Upper: $5.59, Middle: $5.26, Lower: $4.93).
• Key Levels: Support at $5.33 (30D MA), resistance at $5.45 (200D MA).
• Options Focus: Two contracts stand out for their gamma and leverage:
- BLZE20250919P7.5 (Put): Strike $7.5, Expiry 2025-09-19, IV 70.66%, Delta -0.6287, Theta -0.0019, Gamma 0.2306, Turnover 115. High gamma ensures sensitivity to price swings; IV suggests volatility premium.
- BLZE20260116C7.5 (Call): Strike $7.5, Expiry 2026-01-16, IV 56.77%, Delta 0.4738, Theta -0.0037, Gamma 0.1571, Turnover 151. Moderate delta balances directional risk with leverage.
• Payoff Analysis: A 5% upside to $6.99 would yield $0.99 profit for the put (max loss capped at $0.52) and $0.49 for the call (strike $7.5).
• Action: Aggressive bulls should buy the BLZE20250919P7.5 for short-term volatility capture, while longer-term bulls target the BLZE20260116C7.5 for gamma-driven gains if the $7.5 level breaks.

Backtest Backblaze Stock Performance
The backtest of BLZE's performance after a 25% intraday surge shows mixed results. While the 3-Day win rate is 45.41%, indicating a higher probability of positive returns in the short term, the 10-Day and 30-Day win rates are lower at 43.29% and 43.06%, respectively. This suggests that while BLZE may experience some immediate gains, longer-term returns are more variable. The maximum return during the backtest period was 0.03%, which occurred on the same day as the 25% surge, indicating that the stock did not consistently build on the intraday gains.

BLZE’s Momentum Hinges on $7.5 Breakout—Act Now for Gamma-Driven Gains
Backblaze’s 24.8% surge is a high-conviction trade driven by earnings optimism and a strategic buyback, but sustainability depends on breaking above $7.5. The BLZE20250919P7.5 put offers immediate volatility capture, while the BLZE20260116C7.5 call provides leverage for a sustained move. With Microsoft (MSFT) up 0.13%, the software sector remains cautiously optimistic. Watch the $7.5 level—breakout confirms bullish momentum, breakdown triggers profit-taking.