Rackspace Technology (NASDAQ:RXT) Shares Down 5.7% – Should You Sell?

Shares of Rackspace Technology, Inc. (NASDAQ:RXT) dropped 5.7% on Thursday . The stock traded as low as $4.44 and last traded at $4.3750. 1,576,411 shares traded hands during mid-day trading, a decline of 93% from the average session volume of 21,637,877 shares. The stock had previously closed at $4.64.

More Rackspace Technology News

Here are the key news stories impacting Rackspace Technology this week:

• Positive Sentiment: Rackspace reported quarterly revenue of $670.1 million, above the $646 million analyst consensus, while its adjusted loss per share was $0.08 versus estimates of a $0.09 loss. The results initially supported a sharp move higher in the shares. Rackspace Technology Shares Gap Up Following Earnings Beat
• Positive Sentiment: The company appointed Chetan Gupta, Ph.D., as chief AI officer. He will lead Rackspace’s AI strategy, research, governance and customer adoption, with a focus on enterprise, regulated-industry and sovereign AI deployments. The move may strengthen the company’s positioning in a strategically important growth market, although no immediate financial impact was disclosed. Rackspace Technology Appoints Chief AI Officer
• Neutral Sentiment: Multiple law firms are soliciting investors who purchased Rackspace securities from May 7 through July 8, 2026, to seek lead-plaintiff status by September 28, 2026. These releases largely repeat the same lawsuit announcement rather than representing separate new cases. Kaplan Fox Rackspace Investor Notice
• Negative Sentiment: The securities class action alleges that Rackspace and certain executives violated federal securities laws through material misstatements or omissions related to public-cloud resale representations and the company’s enterprise AI efforts. The notices reference a subsequent $125 million reduction in guidance after previously reaffirmed full-year targets. The allegations have not been proven, but the litigation creates legal, reputational and potential financial risks for RXT. SueWallSt Rackspace Class Action Summary

Wall Street Analyst Weigh In

Several equities research analysts recently commented on RXT shares. Wall Street Zen cut Rackspace Technology from a “hold” rating to a “sell” rating in a research report on Saturday. Royal Bank Of Canada boosted their target price on Rackspace Technology from $2.50 to $4.00 and gave the stock a “sector perform” rating in a research report on Wednesday, June 17th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Rackspace Technology in a report on Tuesday, June 2nd. One research analyst has rated the stock with a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, Rackspace Technology presently has a consensus rating of “Reduce” and a consensus target price of $4.00.

Rackspace Technology Stock Down 2.1%

The company has a market cap of $1.07 billion, a P/E ratio of -6.48 and a beta of 3.05. The business has a fifty day simple moving average of $5.25 and a two-hundred day simple moving average of $3.27.

Rackspace Technology (NASDAQ:RXT) last released its quarterly earnings results on Tuesday, August 11th. The company reported ($0.08) earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of ($0.09) by $0.01. The firm had revenue of $670.10 million for the quarter, compared to the consensus estimate of $646.00 million. On average, equities analysts predict that Rackspace Technology, Inc. will post -0.28 EPS for the current fiscal year.

Insider Buying and Selling

In other Rackspace Technology news, CFO Mark A. Marino sold 48,099 shares of the company’s stock in a transaction that occurred on Thursday, June 4th. The shares were sold at an average price of $5.56, for a total transaction of $267,430.44. Following the completion of the sale, the chief financial officer directly owned 3,370,431 shares of the company’s stock, valued at approximately $18,739,596.36. This represents a 1.41% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Corporate insiders own 2.30% of the company’s stock.

Institutional Investors Weigh In On Rackspace Technology

Several hedge funds and other institutional investors have recently modified their holdings of the stock. Legal & General Group Plc purchased a new position in Rackspace Technology during the second quarter valued at $58,000. Quantbot Technologies LP purchased a new stake in Rackspace Technology in the second quarter worth about $63,000. Allworth Financial LP bought a new position in shares of Rackspace Technology in the second quarter worth about $66,000. Strategic Investment Solutions Inc. IL bought a new position in shares of Rackspace Technology in the second quarter worth about $67,000. Finally, Wealthcare Advisory Partners LLC bought a new position in shares of Rackspace Technology during the 2nd quarter valued at approximately $72,000. 82.48% of the stock is currently owned by hedge funds and other institutional investors.

Rackspace Technology Company Profile

Rackspace Technology (NASDAQ: RXT) is a leading provider of managed multi-cloud solutions and services, specializing in the deployment, management and optimization of public and private cloud environments. The company helps organizations design and operate applications across platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud and its own private cloud infrastructure. Rackspace’s core offerings include cloud migration, application modernization, data protection, security services and 24x7x365 operational support.

Beyond cloud hosting, Rackspace offers a range of professional services designed to accelerate digital transformation initiatives.