SAN ANTONIO, May 14, 2026, 16:04 (CDT)
- Rackspace ended the session at $7.29, up 26.34%. The stock earlier hit $7.65, marking a new 52-week high.
- First-quarter profit, heavy trading, and an AMD AI infrastructure deal have all fed into the volatility, with the move stretching the streak further.
- Debt still hangs over the rally, while growth across segments stays patchy. The non-GAAP loss continues to be a drag.
Rackspace Technology Inc. surged 26.34% to end Thursday at $7.29, marking another big run as the San Antonio cloud-services player draws buyers with its artificial intelligence infrastructure narrative. Shares peaked at $7.65 before settling to $7.15 in late trading.
Why’s this in focus now? Traders are giving Rackspace — long seen as a managed cloud outfit weighed down by debt — a fresh look, framing it as a potential AI infrastructure play for regulated clients. That’s a tight but current angle: finance, healthcare, and government firms are all shopping for AI setups they can actually audit, lock down, and fit within strict internal rules.
It’s been choppy for RXT. The stock wrapped up at $6.33 on May 12, slid to $5.77 the next day, then ripped higher Thursday as volume topped 39 million shares, according to stock-market data.
Keith Bachman at BMO Capital is sticking with a Hold on Rackspace, according to TipRanks, maintaining his $5 price target. The analyst pointed to Rackspace’s ties with AMD and Palantir as positives for its strategy in governed and regulated AI workloads. Still, Bachman noted the company is only in the early phases of what he calls a multi-year turnaround.
Rackspace posted first-quarter revenue of $678.1 million last week, a slight uptick from $665.4 million the year before. Net income landed at $8.3 million, swinging from a $71.5 million loss. But filings pointed to a $17.8 million operating loss and a $55.8 million gain on debt extinguishment—so the profit wasn’t entirely from the company’s main business.
It was the public-cloud segment that drove growth. Rackspace reported a 7% bump in public cloud revenue, reaching $443 million, but private cloud sales dropped 6% to $235 million. Despite that, the company ended up with a non-GAAP loss of 6 cents per share and put its full-year 2026 revenue forecast at $2.6 billion to $2.7 billion.
Chief Executive Gajen Kandiah said regulated enterprises are taking “deliberate choices” on both the location of their AI workloads and who holds responsibility over them. Rackspace announced it had signed a memorandum of understanding with Advanced Micro Devices, aiming to build what it describes as governed enterprise AI infrastructure—with security, compliance, and operational responsibility included from the outset. Rackspace Technology, Inc.
So far, AMD’s deal remains just a framework—no guarantee of fresh recurring revenue yet. The idea is to layer AMD Instinct GPUs and EPYC CPUs into a managed stack. AMD executive Dan McNamara points to enterprise AI’s shift into production, calling out a need for “performance and efficiency at scale.” Rackspace Technology, Inc.
Rackspace occupies a tricky niche. The company’s public-cloud segment handles customer operations across Amazon Web Services, Microsoft Azure, and Google Cloud. On the private side, it manages workloads inside Rackspace’s own data centers as well as in outside facilities. So instead of going head-to-head with the hyperscalers, Rackspace plays the dual role of partner and specialist for the big cloud names.
Here’s the catch: the market might be outrunning Rackspace’s fundamentals. As of March 31, the company carried $2.328 billion in principal debt and flagged hefty liquidity requirements, citing debt payments as the main pressure. Rackspace cautioned that it can’t guarantee future cash flow or borrowing will fully cover those needs.
Right now, shares aren’t moving like a typical cloud-services recovery play—they’re acting more like a leveraged AI bet. That setup holds as long as optimism around AMD, Palantir, and regulated AI demand turning into real deals sticks. But if that memorandum remains just talk, or if debt expenses and a sluggish private-cloud segment dominate, the trade can flip in a hurry.
