RXT Stock Almost Doubled In Value Today – What’s The New Deal With AMD All About?

• Rackspace said the new setup will aim to reverse the model in which companies are required to rent GPU capacity by the hour and bear the operational burden themselves.
• The firm noted that the partnership with AMD will complete its curated enterprise AI stack and introduce four integrated capabilities.
• The company reported first-quarter revenue of $678.1 million, beating analysts' expectations of $660 million, while earnings of $0.03 per share marked a sharp reversal from the loss of $0.31 per share in the year-ago quarter.

Shares of Rackspace Technology, Inc. (RXT) surged over 90% on Thursday after the company announced it had signed a memorandum of understanding to establish a new category of enterprise AI infrastructure.

Rackspace stated that it has inked a multiyear AI partnership with AMD to develop a new category called ‘governed enterprise AI infrastructure.’

The company said that the new setup will aim to reverse the model in which companies are required to rent GPU capacity by the hour and bear the operational burden themselves, including integration, security, and accountability.

According to Rackspace, the new model will integrate AMD Instinct GPUs and EPYC CPUs into a fully managed, governed stack.

RXT’s Managed Enterprise AI Setup

The company also stated that, through this partnership, both companies will aim to create a new type of managed enterprise AI setup in which AMD hardware runs within a fully governed, Rackspace-operated stack, with Rackspace responsible for everything from the chips to the end results.

“As enterprises move AI out of the lab and into production environments, they're asking who they can trust to run it there,” said Gajen Kandiah, Chief Executive Officer at Rackspace Technology.

“Our collaboration with Rackspace delivers AMD AI compute into managed, private, and governed environments so enterprises can deploy AI with the performance and flexibility their workloads demand,” said Dan McNamara, senior vice president and general manager, Compute & Enterprise AI, AMD.

Rackspace also noted that the partnership with AMD will complete its curated enterprise AI stack and introduce four integrated capabilities.

RXT’s Q1 Earnings At A Glance

The company reported first-quarter revenue of $678.1 million, beating analysts' expectations of $660 million, while earnings of $0.3 per share marked a sharp reversal from the loss of $0.31 per share in the year-ago quarter.

Rackspace Technology projects full-year total revenue between $2.6 billion and $2.7 billion, with non-GAAP operating profit expected to be $160 million to $170 million.

What Do Retail Traders Think About RXT?

On Stocktwits, retail sentiment surrounding the stock is ‘extremely bullish’ amid ‘extremely high’ message volumes. 

One user on Stocktwits said RXT is a long-term bet.

Another user said the company will attain billions of dollars in revenue in the next three to five years.

Shares of Rackspace Technology have soared by more than 355% so far this year.

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