Rackspace Technology (NASDAQ:RXT) Shares Gap Up – Still a Buy?

by · The Markets Daily

Rackspace Technology, Inc. (NASDAQ:RXT – Get Free Report) gapped up prior to trading on Thursday . The stock had previously closed at $3.24, but opened at $3.52. Rackspace Technology shares last traded at $3.1960, with a volume of 8,907,848 shares changing hands.

Key Rackspace Technology News

Here are the key news stories impacting Rackspace Technology this week:

  • Positive Sentiment: Rackspace joined the NVIDIA Cloud Partner Program and announced NVIDIA Blackwell-powered infrastructure for regulated enterprises and government customers. The offering combines NVIDIA accelerated computing, Palantir software and Rackspace-managed private cloud services, strengthening the company’s positioning in the growing sovereign and enterprise AI market. The announcement prompted a positive initial market reaction. Rackspace NVIDIA Cloud Partner Program announcement
  • Neutral Sentiment: Rackspace CEO Gajakarnan Vibushanan Kandiah sold 498,728 shares for approximately $1.6 million under a pre-arranged Rule 10b5-1 plan. The filing stated that the sale was made to cover tax-withholding obligations tied to vested equity awards, making it less indicative of a discretionary bearish outlook, although the transaction reduced his direct stake by nearly 12%. Rackspace SEC Form 4 filing
  • Negative Sentiment: Several law firms publicized a securities class action against Rackspace and urged affected investors to seek lead-plaintiff status by September 28, 2026. The proposed class covers purchases made from May 7 through July 8, 2026. The repeated announcements are increasing attention on potential legal costs and liabilities. Rackspace securities class action notice
  • Negative Sentiment: The lawsuits allege that Rackspace misled investors about its AI strategy, including workforce reductions, exits from certain hosting businesses and the eventual $150 million reduction to its full-year revenue outlook. These allegations followed a reported sharp stock decline; they remain unproven claims, but could weigh on sentiment and create additional uncertainty around the company’s transition toward AI-focused services. Rackspace shareholder lawsuit alert

Analyst Upgrades and Downgrades

RXT has been the topic of several research analyst reports. Wall Street Zen cut Rackspace Technology from a “hold” rating to a “sell” rating in a research note on Saturday, August 15th. Royal Bank Of Canada boosted their target price on shares of Rackspace Technology from $2.50 to $4.00 and gave the company a “sector perform” rating in a research note on Wednesday, June 17th. Finally, Weiss Ratings reissued a “sell (d-)” rating on shares of Rackspace Technology in a report on Friday, August 28th. One research analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of “Reduce” and a consensus price target of $4.00.

Check Out Our Latest Research Report on RXT

Rackspace Technology Stock Down 2.9%

The firm has a market capitalization of $801.57 million, a price-to-earnings ratio of -4.84 and a beta of 3.05. The company has a 50-day moving average price of $4.18 and a 200-day moving average price of $3.63.

Rackspace Technology (NASDAQ:RXT – Get Free Report) last posted its earnings results on Monday, August 10th. The company reported ($0.08) EPS for the quarter, beating the consensus estimate of ($0.09) by $0.01. The business had revenue of $670.10 million during the quarter, compared to analyst estimates of $646.00 million. As a group, analysts forecast that Rackspace Technology, Inc. will post -0.28 earnings per share for the current year.

Insiders Place Their Bets

In related news, CEO Gajakarnan Vibushanan Kandiah sold 498,728 shares of Rackspace Technology stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $3.21, for a total transaction of $1,600,916.88. Following the sale, the chief executive officer directly owned 3,684,955 shares in the company, valued at $11,828,705.55. The trade was a 11.92% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Anthony Scott sold 48,780 shares of the company’s stock in a transaction dated Friday, August 14th. The stock was sold at an average price of $4.25, for a total transaction of $207,315.00. Following the completion of the sale, the director directly owned 180,215 shares of the company’s stock, valued at $765,913.75. The trade was a 21.30% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 714,141 shares of company stock worth $2,299,799. 2.30% of the stock is owned by company insiders.

Hedge Funds Weigh In On Rackspace Technology

Several large investors have recently bought and sold shares of RXT. BlackRock Inc. bought a new stake in shares of Rackspace Technology during the 2nd quarter worth about $51,411,000. Vanguard Group Inc. increased its stake in shares of Rackspace Technology by 6.1% during the third quarter. Vanguard Group Inc. now owns 6,288,882 shares of the company’s stock valued at $8,867,000 after acquiring an additional 359,087 shares during the period. Janus Henderson Group PLC increased its stake in shares of Rackspace Technology by 179.7% during the first quarter. Janus Henderson Group PLC now owns 2,937,670 shares of the company’s stock valued at $2,878,000 after acquiring an additional 1,887,317 shares during the period. Geode Capital Management LLC increased its stake in shares of Rackspace Technology by 4.2% during the fourth quarter. Geode Capital Management LLC now owns 2,408,000 shares of the company’s stock valued at $2,338,000 after acquiring an additional 96,760 shares during the period. Finally, Renaissance Technologies LLC raised its holdings in Rackspace Technology by 14.0% during the first quarter. Renaissance Technologies LLC now owns 2,041,600 shares of the company’s stock worth $2,000,000 after purchasing an additional 250,700 shares in the last quarter. Institutional investors and hedge funds own 82.48% of the company’s stock.

About Rackspace Technology

(Get Free Report)

Rackspace Technology (NASDAQ: RXT) is a leading provider of managed multi-cloud solutions and services, specializing in the deployment, management and optimization of public and private cloud environments. The company helps organizations design and operate applications across platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud and its own private cloud infrastructure. Rackspace’s core offerings include cloud migration, application modernization, data protection, security services and 24x7x365 operational support.

Beyond cloud hosting, Rackspace offers a range of professional services designed to accelerate digital transformation initiatives.

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