Rackspace Technology shares jumped 21% on Tuesday to their highest intraday level since May 15, extending a rally driven by the company's AMD-powered AI infrastructure push. The stock has gained more than 1,300% from its February low as investors bet on AI infrastructure demand.
Rackspace Technology shares surged 21% on Tuesday to their highest intraday level since May 15, extending a rally driven by the company's AMD-powered AI infrastructure push.
The San Antonio-based multi-cloud services provider has gained more than 1,300% from its February low of $0.39, when it was trading as a penny stock. The turnaround began in May after Rackspace announced a multi-year agreement with Advanced Micro Devices to deploy AMD-powered AI infrastructure, sending shares up 30% in a single session, according to company filings. The stock hit a 52-week high of $7.65 on May 14 following the deal.
Rackspace reported first-quarter revenue of $678 million, up 2% year over year, as it pivots toward higher-margin AI and cloud services. The company's market capitalization stood at roughly $1.12 billion as of early June. In a separate SEC filing, Chief Human Resources Officer Kellie Teal-Guess sold 33,966 shares on June 4 at a weighted average price of $5.56, though the transaction was executed under a pre-arranged Rule 10b5-1 trading plan to cover tax withholding obligations on vesting restricted stock units.
The rally positions Rackspace as a potential beneficiary of the broader AI infrastructure buildout, where enterprises are seeking alternatives to the dominant cloud hyperscalers. With a one-year total return of 255% as of early June, the stock has dramatically outperformed the S&P 500, though its valuation remains a fraction of larger cloud competitors. The broader market also rallied Tuesday, with the S&P 500 rising 1.91% and the Nasdaq Composite jumping 3% after a U.S.-Iran peace framework fueled a broad risk-on move. Investors will watch for any further details on the AMD partnership's revenue contribution when the company reports second-quarter results.
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