NEW YORK, June 17, 2026, 14:06 (EDT)
- Rackspace Technology jumped 33.8% to $8.31 in recent Nasdaq trading after announcing a definitive AMD AI-compute deal.
- Rackspace will provide 30 megawatts of AMD-powered compute to start, according to the deal. Rollout will happen in phases from late 2026 through 2028 at Rackspace data centers.
- Rackspace is cutting around 15% of its global staff and will put more focus on enterprise AI, the company said in a separate filing.
Rackspace Technology stock surged on heavy volume Wednesday, building on two days of steep gains. The cloud-services company finalized its May memorandum with Advanced Micro Devices into a binding deal for AI data-center capacity.
The stock gained $2.10, or 33.8%, to trade at $8.31, having reached $8.34 just before. There were roughly 42.8 million shares traded, well above normal for the small-cap.
Rackspace has been pushing to pitch itself as an enterprise AI infrastructure operator rather than just a managed cloud shop. The new deal with AMD is for an initial 30 MW of capacity, covering AMD Instinct GPUs and EPYC CPUs for Rackspace’s international data centers, according to both firms.
Rackspace CEO Gajen Kandiah said regulated companies want AI infrastructure that is “governed from the ground up.” AMD’s Dan McNamara said clients need the “right mix” of accelerated and general-purpose compute. Accelerated compute means GPUs and other chips built to handle big AI jobs faster than regular processors. Rackspace Technology
Rackspace’s deal gives investors a simpler story after years of trading like an IT-services laggard, not a cloud growth pick. According to MarketWatch, which cited Dow Jones Market Data, Rackspace had already ranked as the Russell 2000’s top performer for 2026, ahead of Micron, Arm and Marvell, before its jump on Wednesday.
Rackspace is cutting jobs. In an 8-K, the company said it approved a workforce realignment on June 10 that will hit about 15% of global staff. The move comes with a $14 million to $19 million price tag, but Rackspace expects to see annualized run-rate savings of $75 million to $85 million if the cuts had been in place for a year.
Rackspace’s Q1 numbers keep the AI story at the front. The company posted first-quarter revenue at $678 million, up 2% year-on-year. Public Cloud grew 7%, while Private Cloud slipped 6%. Rackspace set 2026 revenue guidance at $2.6 billion to $2.7 billion.
There are a few caveats. The SEC filing said individual deployments require more terms, like pricing and financials. Rackspace also needs more financing before it can go ahead with deployments under the deal. AMD isn’t required to sign off on any specific deployment under the agreement.
BMO Capital’s Keith Bachman stuck with a Hold rating last month, though he bumped up his price target to $5. Bachman called out AMD and Palantir links as important, but said Rackspace is still in the early stages of a turnaround and has patchy growth across segments. Not every analyst is chasing the rally.
This is a short week for trading. Nasdaq shows markets are shut on Friday, June 19, for Juneteenth. That gives investors less time before the long break to decide if the AMD deal is a lasting shift or just another quick AI trade in small caps.
