Rackspace Technology, Inc. (NASDAQ:RXT) stock is soaring on Thursday following a significant announcement regarding a strategic partnership with Advanced Micro Devices, Inc. (NASDAQ:AMD), and the release of its first-quarter results.

Rackspace Technology reported a first-quarter adjusted loss per share of six cents, missing the analyst consensus estimate of a four-cent loss. Quarterly sales of $678.100 million (+2% year over year) outpaced the Street view of $660.83 million.

Private cloud revenue declined 6% year over year to $235 million, while public cloud revenue increased 7% to $443 million.

Adjusted operating profit was $31 million in the first quarter, an increase of 20%.

Gross profit fell 6.1% year over year to $119.1 million, while margins contracted to 17.6% from 19.1%.

Rackspace exited the quarter with cash and equivalents worth $94 million, down from $105.8 million in the last quarter.

Outlook

Rackspace Technology reaffirmed its fiscal 2026 adjusted loss guidance of 20 cents to 15 cents per share, compared with the analyst estimate for a loss of 9 cents per share.

The company also maintained its fiscal 2026 sales outlook of $2.6 billion to $2.7 billion, versus the Street estimate of $2.64 billion.

Deal With Advanced Micro Devices

The companies have signed a Memorandum of Understanding to create a new category of managed enterprise AI infrastructure, which is expected to enhance Rackspace’s offerings in the rapidly growing AI market.

This collaboration aims to integrate AMD’s technology into a fully managed cloud environment tailored for regulated enterprises, addressing the increasing demand for secure and accountable AI solutions. By embedding AMD’s Instinct GPUs and EPYC CPUs, Rackspace is positioning itself to lead in the enterprise AI space.

Despite this positive news, broader market conditions are mixed, with the

RXT Technical Analysis

The stock’s recent surge has pushed it significantly above its moving averages, with the current price of $4.13 sitting 178.3% above the 20-day simple moving average (SMA) of $1.54 and 169.3% above the 50-day SMA of $1.59. The moving average convergence divergence (MACD) indicator is currently above its signal line, indicating that downside pressure is easing, which supports the bullish momentum seen in the stock’s price action.

The stock has shown impressive performance over the past year, with a 12-month gain of 198.25%. However, the 20-day SMA is currently below the 50-day SMA, suggesting a potential bearish crossover, which could indicate a need for caution in the near term.

Rackspace Technology Inc is an end-to-end, hybrid, multi-cloud technology services company. It designs, builds, and operates its customers’ cloud environments across all technology platforms, irrespective of technology stack or deployment model. The company’s solutions include Application Services, Data, Colocation, Cloud, Managed Hosting, Professional Services, and Security and Compliance.

The recent partnership with AMD is crucial as it positions Rackspace to enhance its enterprise AI offerings, tapping into a growing market where security and governance are paramount. This collaboration could significantly bolster its competitive edge in the cloud services sector.

RXT Price Action: Rackspace Technology shares were up 70.70% at $3.87 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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