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Rackspace Technology (RXT) stock is extending gains on Tuesday after the cloud provider announced a sizable hardware partnership with Advanced Micro Devices (AMD).
This definitive agreement is aimed at rolling out a phased, 30-megawatt (MW) computing footprint across RXT’s global data centers over the next two years.
Rackspace shares have been a lucrative investment in 2026, currently trading at more than 6x their price at the start of this year.
Why the AMD Deal Is Bullish for Rackspace Stock
Teaming up with AMD bolsters RXT shares’ position within lucrative, highly regulated sectors.
By utilizing AMD’s customized architecture, Rackspace is launching a new category of “governed enterprise AI infrastructure” purpose-built for sovereign and highly sensitive environments.
This infrastructure is tailored for industries, including health care, that demand rigid data security and clinical AI compliance.
Because highly regulated sectors often pay premium rates for comprehensive security and single-operator accountability, this partnership enables RXT to bypass low-margin public cloud battles and capture highly profitable, sticky enterprise workloads.
Note that Rackspace’s relative strength index (RSI), even after today’s rally, sits in the early 60s, indicating significant further room to the upside before the stock hits overbought territory.
RXT to Deliver Next-Gen AI Compute at Scale
Rackspace shares rallied today also because of the sheer processing power and flexibility this deal injects into the company’s technological ecosystem.
The multi-year rollout builds a unified Enterprise AI Cloud incorporating AMD’s advanced Instinct GPUs alongside its EPYC CPUs.
This holistic, single-operator environment lets RXT route specific enterprise workloads seamlessly to the most efficient compute layer, whether optimizing for intensive artificial intelligence training or rapid inference.
Scaling out a massive 30 MW footprint ensures Rackspace Technology can meet the surging global demand for artificial intelligence processing without bottlenecking its infrastructure.
Wall Street Recommends Caution on RXT Shares
Overall, the AMD deal positions RXT as one of the few non‑hyperscalers capable of delivering sovereign‑grade AI infrastructure, a category seeing huge demand from governments and regulated enterprises worldwide.
By pairing Instinct GPUs with EPYC CPUs inside a unified control plane, Rackspace Technology effectively becomes a full‑stack AI infrastructure provider rather than a commodity cloud reseller.
That said, Wall Street still rates RXT stock a “Hold," with the mean price objective of about $4.33, indicating potential downside of more than 33% from current levels.
