Rackspace Technology shares surged on Tuesday after the company signed a definitive agreement with Advanced Micro Devices for the phased deployment of the initial 30 megawatts of AMD-based AI compute infrastructure. The partnership aims to enhance Rackspace's offerings in regulated industries like healthcare by providing a governed AI stack for enterprise workloads. Shares were up 11.41% at $6.72 at the time of publication.

Partnership Details

The agreement formalizes a memorandum of understanding announced on May 7, 2026. It positions AMD as a core silicon partner within Rackspace's governed AI infrastructure stack. The companies plan to begin the rollout in late 2026 and continue through 2028.

The architecture will integrate AMD Instinct GPUs, including MI355X and MI350P models, along with future generations, and AMD EPYC CPUs. This unified enterprise AI cloud framework will enable workload-specific routing to optimize performance and accountability across end-to-end operations.

Technical Outlook

Rackspace Technology has seen a gain of 334.93% over the past 12 months. The stock is trading at $7.65, which is 35.9% above its 20-day simple moving average (SMA) of $4.99 and 275.7% above its 200-day SMA of $1.81. The moving average convergence divergence (MACD) is below its signal line, indicating that upside momentum is fading unless it reclaims that baseline.

Earnings Preview

The next major catalyst is the earnings report estimated for August 6, 2026. Analysts project a loss of 3 cents per share, an improvement from a loss of 6 cents. Revenue is estimated at $657.10 million, down from $666.30 million. The stock holds a Hold rating with an average price target of $2.50.

RBC Capital analyst David Paige has maintained a Sector Perform rating on Rackspace Technology while raising the price target to $4 from $2.5. The revised target indicates a shift in the valuation outlook for the technology company.

The rating and price target adjustment were issued by RBC Capital, covering Rackspace Technology listed on NASDAQ under the ticker RXT. The decision to raise the price target suggests a more optimistic view on the stock's potential performance despite the Sector Perform stance.

Key Details

The Sector Perform rating implies that the stock is expected to perform in line with the broader sector average. The increase in the price target highlights a specific reassessment of the company's financial prospects or market position.