Rackspace Keeps Climbing As AMD Deal And Earnings Fuel Momentum

Rackspace Technology Inc. (NASDAQ:RXT) shares continue climbing higher in Tuesday trading, after the stock surged over 5 days, following the company's AI partnership announcement with Advanced Micro Devices Inc. (NASDAQ:AMD) and first quarter results. Rackspace and AMD signed a memorandum of understanding to establish a multi-year partnership to build an Enterprise AI Cloud for regulated industries. The collaboration will integrate AMD's Instinct GPUs and EPYC CPUs into Rackspace's managed cloud offerings, with a focus on governance and accountability for AI infrastructure. First Quarter Results The rally in Rackspace shares followed the company's first-quarter results, which showed revenue of $678.1 million, up 2% year over year and above the Street estimate of $660.83 million. Growth was driven by public cloud revenue, which increased 7% to $443 million, while private cloud revenue declined 6% to $235 million. Adjusted operating profit rose 20% to $31 million, though Rackspace reported an adjusted loss of six cents per share, wider than analyst expectations for a four-cent loss. Gross margin declined to 17.6% from 19.1% a year earlier. Rackspace reaffirmed its fiscal 2026 revenue guidance of $2.6 billion-$2.7 billion, in line with the Street estimate of $2.64 billion. Short Interets Rises Short interest in Rackspace Technology increased to 23.86 million shares from 21.92 million in the latest reporting period, representing 20.76% of the public float. Based on the stock's average daily trading volume of 5.25 million shares, it would take about 4.54 days for short sellers to cover their positions. RXT Technical Analysis: Bullish Trend Meets Overbought Signals The stock has shown impressive long-term performance, with a 12-month gain of 260.77%. However, the current price of $4.46 is significantly above key moving averages, with the 20-day simple moving average (SMA) at $2.06, indicating a strong bullish trend. The Relative Strength Index (RSI) currently sits at 75.59, suggesting the stock is in overbought territory and could pull back. Additionally, the 20-day SMA is 119.9% above the 50-day SMA, reinforcing the stock’s bullish momentum. Key Resistance: $6.00 — This level represents the 52-week high, which could act as a psychological barrier for traders. Key Support: $1.76 — This is the 50-day SMA, which may provide a cushion if the stock experiences a downturn. RXT Earnings Preview And Analyst Price Targets Rackspace Technology, Inc. Common Stock is slated to provide its next financial update on August 6, 2026 (estimated). EPS Estimate: Loss of 3 cents (Up from Loss of 6 cents) Revenue Estimate: $665.06 million (Down from $666.30 million) Analyst Consensus & Recent Actions: The stock carries a Hold rating with an average price target of $2.50. Recent analyst moves include: RBC Capital: Sector Perform (Raises Target to $2.50) (Feb. 27) BMO Capital: Market Perform (Lowers Target to $1.40) (Aug. 12, 2025) RXT Stock Price Activity: Rackspace Technology shares were up 5.01% at $4.92 at the time of publication on Tuesday, according to Benzinga Pro data. Photo via Shutterstock