Rackspace Technology (NASDAQ:RXT) Trading Up 12.4% Following Analyst Upgrade

Key Points

• Rackspace Technology shares jumped 12.4% after Royal Bank of Canada lifted its price target from $2.50 to $4.00, though it kept a sector perform rating.
• The rally is being fueled by optimism around Rackspace’s partnership with AMD, including a phased deployment of 30 MW of AI compute capacity across its data-center footprint.
• Despite the recent surge, some analysts remain cautious: the stock’s average rating is still Reduce, and RBC’s new price target remains well below the stock’s recent trading level.

Shares of Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) were up 12.4% during trading on Wednesday 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 $7.40 and last traded at $6.9770. Approximately 10,561,202 shares traded hands during trading, a decline of 56% from the average daily volume of 23,933,275 shares. The stock had previously closed at $6.21.

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

Insider Transactions at Rackspace Technology

In other Rackspace Technology news, CFO Mark A. Marino sold 48,099 shares of Rackspace Technology 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 transaction, 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 position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. 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. Insiders own 2.30% of the company's stock.

Key Headlines Impacting Rackspace Technology

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

• Positive Sentiment: Rackspace announced a definitive agreement with AMD for a phased deployment of 30 MW of AMD AI compute capacity across its data-center footprint, boosting sentiment around future revenue opportunities from AI infrastructure. Article Title
• Positive Sentiment: Market coverage highlighted the AMD deal as a key reason the stock has been surging, with investors betting the partnership strengthens Rackspace’s position in AI data-center services. Article Title
• Positive Sentiment: Trading activity spiked sharply, including unusually heavy call-option buying, suggesting traders are positioning for continued upside following the AMD announcement. Article Title
• Neutral Sentiment: Royal Bank of Canada raised its price target on Rackspace to $4.00 from $2.50 but kept a “sector perform” rating, which suggests improving expectations but still implies the shares may be ahead of fundamentals at current levels. Article Title
• Neutral Sentiment: Earlier coverage and management discussion focused on the phased AMD AI compute rollout and GPU-as-a-Service collaboration, reinforcing that the move is a longer-term strategic initiative rather than an immediate revenue jump. Article Title
• Negative Sentiment: RBC’s new $4 price target is still well below the stock’s recent trading level, signaling that some analysts think the rally may have run ahead of near-term valuation. Article Title

Hedge Funds Weigh In On Rackspace Technology

A number of hedge funds have recently bought and sold shares of RXT. Abel Hall LLC purchased a new position in Rackspace Technology during the 1st quarter worth $30,000. Savant Capital LLC purchased a new position in Rackspace Technology during the 3rd quarter worth $33,000. Creative Planning boosted its holdings in Rackspace Technology by 114.2% during the 2nd quarter. Creative Planning now owns 25,715 shares of the company's stock worth $33,000 after acquiring an additional 13,708 shares during the last quarter. SG Americas Securities LLC purchased a new position in Rackspace Technology during the 1st quarter worth $34,000. Finally, Jump Financial LLC purchased a new position in Rackspace Technology during the 4th quarter worth $34,000. 82.48% of the stock is owned by hedge funds and other institutional investors.

Rackspace Technology Trading Up 14.2%

The stock has a market capitalization of $1.77 billion, a PE ratio of -11.56 and a beta of 3.03. The stock's fifty day simple moving average is $3.58 and its 200-day simple moving average is $2.00.

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

Rackspace Technology Company Profile

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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