Rackspace price target raised to $5 from $2 at BMO Capital

BMO Capital raised the firm’s price target on Rackspace (RXT) to $5 from $2 and keeps a Market Perform rating on the shares after its Q1 results. The quarter was solid, though the key highlight of Q1 was the announced AMD (AMD) MoU, in which Rackspace plans to integrate AMD CPUs and GPUs across governed AI infrastructure, the analyst tells investors in a research note. BMO adds that the quarter reinforces its view that Rackspace is pursuing a strategy centered on partnerships with key AI vendors such as Palantir (PLTR) and AMD to strengthen long-term positioning for regulated AI workloads.