Rackspace Technology (RXT) shares are jumping on Tuesday after the company announced a definitive deal with Advanced Micro Devices (AMD) to deploy an initial 30 megawatts of AMD-based AI compute infrastructure. The phased rollout is set to begin in late 2026 and continue through 2028.
The architecture will combine AMD Instinct GPUs—including the MI355X and MI350P, plus future generations—with AMD EPYC CPUs inside a unified enterprise AI cloud framework. The idea is to allow workload-specific routing that optimizes performance and keeps accountability across end-to-end operations. Think of it as a governed AI stack designed for enterprises that need both power and oversight.
This collaboration is particularly aimed at regulated industries, with healthcare as a key focus. Both companies are dedicating resources to engage enterprise customers and co-develop AI solutions. As businesses move from experimenting with AI to embedding agent-driven workflows into core systems, the demand for secure, production-scale infrastructure is growing fast.
The agreement formalizes a memorandum of understanding announced on May 7, 2026, and positions AMD as a core silicon partner within Rackspace's governed AI infrastructure stack.
Technical Outlook: Momentum and Key Levels
Over the past 12 months, Rackspace stock has surged 334.93%. Currently trading at $7.65, the stock sits 35.9% above its 20-day simple moving average (SMA) of $4.99 and a whopping 275.7% above its 200-day SMA of $1.81. But here's the catch: the moving average convergence divergence (MACD) is below its signal line, suggesting that upside momentum is fading unless the stock can reclaim that baseline. In plain English, the stock is riding high, but the engine might be sputtering.
Key Resistance: $7.50 — a level where rebounds could stall.
Key Support: $4.99 — the 20-day SMA, which could provide a cushion if the stock pulls back.
Earnings Preview and Analyst Price Targets
The next major catalyst is the earnings report expected around August 6, 2026. Analysts are estimating a loss of 3 cents per share (improving from a loss of 6 cents a year ago) and revenue of $657.10 million (down from $666.30 million).
The stock carries a Hold rating with an average price target of $2.50 — well below the current price. Recent analyst actions include:
- RBC Capital: Sector Perform, raised target to $2.50 (February 27, 2026)
- RBC Capital: Sector Perform, lowered target to $1.75 (November 10, 2025)
- BMO Capital: Market Perform, lowered target to $1.40 (August 12, 2025)
Momentum and Market Signals
Rackspace scores a 99.45 on momentum, indicating it's outperforming the broader market. But the fading MACD is a warning sign: momentum may not sustain the recent price gains. Investors should keep an eye on whether the stock can hold above key support levels.
Price Action: Rackspace shares were up 11.41% at $6.72 at the time of publication on Tuesday.
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