Rackspace shares surged over 35% to a four-year high after its price target was raised from $2.50 to $4. The multi-year AMD deal through 2028 and a 10% workforce reduction aim to generate up to $85 million in annual savings and bolster enterprise AI growth.
Rackspace shares climbed more than 35% in a three-day rally, reaching levels not seen since 2022 after analysts updated growth projections and price targets.
Rackspace signed a multi-year agreement to deploy AMD GPUs and EPYC processors across its global data centers through 2028, aiming to expand from bare-metal services into enterprise AI cloud offerings.
The company reduced its workforce by roughly 10%, forecasting up to $19 million in one-time restructuring charges and up to $85 million in annual savings, with a portion of funds redirected to engineering talent and AI solutions.
The stock’s price target was increased from $2.50 to $4 while maintaining a Sector Perform rating, reflecting confidence that the AMD partnership will help capture market share in healthcare, financial services, energy and government sectors.
