AMD
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The stock is doing backflips
Rackspace Technology didn’t exactly wow on the earnings front — it posted a 6-cent adjusted loss per share, a hair worse than the 4-cent loss analysts were expecting. Revenue came in at $678.1 million, which beat the Street, but the rest of the quarter had that classic ‘good enough, not glorious’ vibe.
The AMD hookup is the real spark
The bigger headline is the new memorandum of understanding with AMD. The two companies want to build a managed enterprise AI infrastructure offering for regulated customers, basically taking AMD’s Instinct GPUs and EPYC CPUs and wrapping them in a cloud environment with fewer compliance headaches.
For investors, that matters because it gives Rackspace a cleaner story in one of the hottest corners of tech: enterprise AI. Not the flashy chatbot stuff. The grown-up, security-heavy, budget-approved version.
Mixed quarter, brighter narrative
The numbers were a little like a sandwich with a great top slice and a so-so filling:
- Private cloud revenue fell 6% to $235 million
- Public cloud revenue rose 7% to $443 million
- Adjusted operating profit climbed 20% to $31 million
- Gross margin slipped to 17.6% from 19.1%
Rackspace also kept its fiscal 2026 outlook unchanged, including adjusted loss guidance of 20 cents to 15 cents per share and sales guidance of $2.6 billion to $2.7 billion. Translation: management isn’t suddenly shouting from the rooftops, but it isn’t yanking the steering wheel either.
Why you should care
The market is clearly betting the AMD deal could give Rackspace a better AI story, which can be enough to light a match under a beaten-down stock. Big picture: earnings kept the lights on, but the partnership gave investors a reason to dream a little bigger.