Rackspace Technology (NASDAQ:RXT) Sets New 52-Week High Following Analyst Upgrade

Key Points

• Rackspace Technology stock hit a new 52-week high after Royal Bank of Canada raised its price target to $4.00 from $2.50, even though RBC kept a sector perform rating. The shares traded as high as $8.60 and were last around $7.53, far above the prior close of $6.21.
• AI infrastructure optimism is driving investor interest, with Rackspace’s newly announced agreement with AMD to deploy an initial 30 MW of AMD-based AI compute across its data centers seen as a potential growth catalyst. The article also notes heavy call-option buying and other reports framing Rackspace as an AI beneficiary.
• Risks remain despite the rally, as Rackspace still faces financial pressure including a recent earnings miss, negative margins, and tight liquidity. Analyst sentiment is mixed, with the stock carrying an average “Reduce” rating and an average target price well below its current trading level.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report)'s stock price hit a new 52-week high during trading on Thursday after Royal Bank Of Canada raised their price target on the stock from $2.50 to $4.00. Royal Bank Of Canada currently has a sector perform rating on the stock. Rackspace Technology traded as high as $8.60 and last traded at $7.53, with a volume of 65341100 shares. The stock had previously closed at $6.21.

Separately, Weiss Ratings reissued a "sell (d-)" rating on shares of Rackspace Technology in a report on Tuesday, June 2nd. Two research analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Rackspace Technology presently has an average rating of "Reduce" and an average target price of $2.70.

Insider Buying and Selling at Rackspace Technology

In other news, CFO Mark A. Marino sold 48,099 shares of the business's stock in a transaction on Thursday, June 4th. The shares were sold at an average price of $5.56, for a total transaction of $267,430.44. Following the sale, the chief financial officer directly owned 3,370,431 shares of the company's stock, valued at $18,739,596.36. The trade was a 1.41% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 2.30% of the stock is owned by company insiders.

Rackspace Technology News Summary

Here are the key news stories impacting Rackspace Technology this week:

• Positive Sentiment: Rackspace’s definitive agreement with AMD to deploy an initial 30 MW of AMD-based AI compute across its global data centers is being viewed as a meaningful growth catalyst, suggesting new enterprise revenue opportunities in AI infrastructure. AMD and Rackspace Technology Sign Definitive Agreement for Phased Deployment of 30 MW of AMD AI Compute
• Positive Sentiment: Market enthusiasm is being reinforced by heavy call-option buying and multiple reports highlighting Rackspace as an AI beneficiary, which points to rising investor momentum and short-covering interest. Rackspace Shares Jump 30% After Securing AMD-Powered AI Infrastructure Agreement (RXT)
• Positive Sentiment: Wall Street sentiment also got a lift when Royal Bank of Canada raised its price target on RXT to $4.00 from $2.50, signaling improved expectations for the company’s outlook even though the new target remains below the current share price. Benzinga report on RBC price target increase
• Neutral Sentiment: Recent commentary has framed Rackspace as a higher-beta AI infrastructure play rather than a legacy managed hosting company, which may support valuation but also leaves the stock vulnerable to sharp swings if execution disappoints. RXT Stock Surges To 4-Year Highs — Wall Street Highlights Multi-Industry Growth Potential After AMD Deal
• Negative Sentiment: Despite the AI optimism, Rackspace still faces financial pressure, including a recent earnings miss, negative margins, and tight liquidity, so the stock’s rally depends heavily on successful execution of the AMD rollout and cost cuts. Rackspace Technology earnings report

Institutional Investors Weigh In On Rackspace Technology

Hedge funds have recently added to or reduced their stakes in the business. Savant Capital LLC purchased a new stake in Rackspace Technology in the third quarter valued at $33,000. R Squared Ltd boosted its holdings in Rackspace Technology by 74.3% in the third quarter. R Squared Ltd now owns 25,127 shares of the company's stock valued at $35,000 after purchasing an additional 10,707 shares during the last quarter. Creative Planning boosted its holdings in Rackspace Technology by 114.2% in the second quarter. Creative Planning now owns 25,715 shares of the company's stock valued at $33,000 after purchasing an additional 13,708 shares during the last quarter. Abel Hall LLC purchased a new stake in Rackspace Technology in the first quarter valued at $30,000. Finally, Engineers Gate Manager LP boosted its holdings in Rackspace Technology by 47.1% in the second quarter. Engineers Gate Manager LP now owns 34,777 shares of the company's stock valued at $45,000 after purchasing an additional 11,141 shares during the last quarter. 82.48% of the stock is owned by hedge funds and other institutional investors.

Rackspace Technology Price Performance

The company has a market capitalization of $1.88 billion, a PE ratio of -12.34 and a beta of 3.03. The firm's fifty day simple moving average is $3.71 and its 200 day simple moving average is $2.05.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last posted its quarterly earnings results on Thursday, May 7th. The company reported ($0.06) EPS for the quarter, missing the consensus estimate of ($0.03) by ($0.03). The business had revenue of $678.10 million for the quarter, compared to the consensus estimate of $660.83 million. Rackspace Technology has set its FY 2026 guidance at -0.200--0.150 EPS. On average, equities research analysts anticipate that Rackspace Technology, Inc. will post -0.18 EPS for the current fiscal year.

About Rackspace Technology

Rackspace Technology NASDAQ: RXT is a leading provider of managed multi-cloud solutions and services, specializing in the deployment, management and optimization of public and private cloud environments. The company helps organizations design and operate applications across platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud and its own private cloud infrastructure. Rackspace's core offerings include cloud migration, application modernization, data protection, security services and 24x7x365 operational support.

Beyond cloud hosting, Rackspace offers a range of professional services designed to accelerate digital transformation initiatives.

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