AMD
RXT
New deal, new excuse to buy the dip
Rackspace Technology stock was having one of those “wait, that’s the company?” Fridays, blasting to a fresh 52-week high after the cloud shop posted revenue above Wall Street’s target and doubled down on an AI partnership with AMD.
The headline numbers weren’t exactly a barn-burner — but they helped
Revenue came in at $678.1 million, up 2% from a year ago and above the Street’s $660.83 million estimate. Public cloud did the heavy lifting, climbing 7% to $443 million, while private cloud slipped 6% to $235 million. In other words: one engine is still humming, the other is sounding a little like a tired lawn mower.
The earnings side was less glamorous. Adjusted operating profit rose 20% to $31 million, but Rackspace still posted an adjusted loss of 6 cents per share, which was worse than the 4-cent loss analysts were looking for. Gross margin also slid to 17.6% from 19.1%, so this isn’t a clean victory lap.
Why the AMD tie-up has traders doing cartwheels
The bigger sizzle came from the memorandum of understanding with AMD. The two companies want to build managed enterprise AI infrastructure using AMD’s Instinct GPUs and EPYC CPUs. Translation: Rackspace is trying to position itself as the grown-up cloud layer for companies that want AI power without building their own digital Batcave.
That’s why investors are paying attention. Rackspace also reaffirmed its fiscal 2026 sales guide of $2.6 billion to $2.7 billion, which lines up with Street expectations and gives the rally a little more fuel than just meme-stock vibes.
Big picture
RXT is now trading like the market wants to believe a turnaround story. Whether that lasts depends on one annoying little thing: turning AI buzz and revenue beats into real margins. But for now, the stock has momentum, and momentum is the market’s favorite caffeine.