RBC Capital Raises PT on Rackspace Technology (RXT), Here’s Why
Yahoo Finance ·
RBC Capital Raises PT on Rackspace Technology (RXT), Here’s Why Talha Qureshi Tue, July 7, 2026 at 6:49 PM EDT 2 min read RXT AMD Rackspace Technology, Inc. (NASDAQ: RXT ) has gained more than 569% over the past 6 months, mainly driven by strong fiscal Q1 2026 earnings and the company's partnership with AMD. Rackspace Technology, Inc. (NASDAQ:RXT) also ranks as one of the Best Performing Agentic AI Stocks to Buy . During the quarter, the company posted $678.1 million in revenue and surpassed the estimates of $660.83 million. Management attributed growth to the public cloud segment, which grew 7% year-over-year to $443.4 million and offset a 6% decline in the Private Cloud segment caused by onboarding delays in the healthcare sector. Recently, on June 17, RBC Capital raised its price target on the stock from $2.5 to $4, while maintaining a Sector Perform rating. The firm highlighted the company's partnership with AMD as central to its strategy of becoming the governed enterprise AI operator for regulated industries. The firm noted that a 30 MW AMD compute deployment validates this approach. Moreover, RBC also highlighted a potential for margin expansion, driven by Rackspace's use of existing infrastructure and power capacity, along with its shift from Bare Metal to Enterprise AI Cloud. The firm noted that deployment is expected to ramp from late 2026 through 2028. Management expressed confidence in financing availability, with initial capex of $50 million to $100 million supporting near-term execution. Founded in 1998 and headquartered in San Antonio, Rackspace Technology, Inc. (NASDAQ:RXT) is a global provider of multi-cloud, hybrid-cloud, and enterprise AI infrastructure solutions. The company specializes in IT consulting, cloud migration, cybersecurity, and managing enterprise workloads across major cloud and infrastructure platforms. Rackspace's enterprise AI cloud is built to host and govern AI agents, particularly for regulated enterprises. While we acknowledge the potential of RXT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . READ NEXT: 10 Good Stocks to Invest in Now and 10 Most Undervalued US Stocks According to Hedge Funds . Disclosure: None. Follow Insider Monkey on Google News .
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