Rackspace Technology Stock (RXT) Soars on a New AI MOU With AMD

Rackspace Technology (RXT) stock underwent a massive rally on Thursday after the cloud company revealed a Memorandum of Understanding (MOU) with Advanced Micro Devices (AMD). The two companies signed this MOU with the intent to create “an Enterprise AI Cloud purpose-built for regulated enterprises and sovereign workloads where security, governance, and accountability are non-negotiable.”

According to Rackspace Technology, this new model of business would be a switch from the standard, in which enterprises rent GPUs and carry operational burdens. The new model would change this by adding AMD GPUs and CPUs to a fully managed and governed stack. This would see Rackspace Technology own the stack, helping cement its position in the AI infrastructure sector.

Gajen Kandiah, CEO of Rackspace Technology, said, “Governing AI infrastructure in regulated environments with defined accountability is not something you bolt on after the fact. It must be built in from the start. Rackspace and AMD are building exactly that and in doing so, establishing a new category of enterprise AI infrastructure that the market has been asking for.”

Rackspace Technology Stock Movement Today

Rackspace Technology stock was up 81.94% in premarket trading, following a 7.35% fall yesterday. The shares have also increased 134.02% year-to-date and 57.64% over the past 12 months.

RXT stock trading activity today saw some 44 million shares change hands, compared to a three-month average daily trading volume of about 1.02 million shares.

Is Rackspace Technology Stock a Buy, Sell, or Hold?

Turning to Wall Street, the analysts’ consensus rating for Rackspace Technology is Hold, based on three Hold ratings over the past three months. With that comes an average RXT stock price target of $2.17, representing a potential 4.55% downside for the shares.