Rackspace Technology reported fourth-quarter revenue down 0.4% year-over-year while delivering earnings per share above analyst estimates, marking a double beat despite modest top-line contraction. However, guidance for the upcoming quarter fell below consensus, suggesting management expects headwinds in the near term.

The strategic partnership with Palantir Technologies will integrate Palantir’s data analytics platforms into Rackspace’s cloud services, aiming to accelerate enterprise customer growth and diversify revenue streams. Management projects this alliance will strengthen competitive positioning and drive margin expansion over the next several years.

RBC Capital retained its Sector Perform rating on the stock and raised its 12-month price target from $1.75 to $2.50, reflecting optimism about the company’s operational improvements and strategic initiatives. The new target implies potential upside of over 40% from current levels if execution aligns with analyst projections.