Rackspace surges on AMD AI cloud partnership

On June 16, 2026, Rackspace Technology (RXT) and Advanced Micro Devices (AMD) announced a definitive agreement for the phased deployment of 30 megawatts of AI computing infrastructure powered by AMD technology over the next two years. This deal, valued at over $1 billion, is set to significantly boost Rackspace's AI capabilities and drive growth for both companies. Rackspace shares surged 30% on the news, while AMD's data center business, already up 57% YoY in Q1 2026, is expected to see further growth.

The AI partnership is driving a significant shift in the cloud computing sector. Rackspace, a leading multi-cloud technology services provider, is now positioned to offer advanced, governed enterprise AI solutions to regulated customers. This move could attract more enterprise clients seeking secure AI infrastructure, potentially boosting Rackspace's market share. Meanwhile, AMD, already a leader in data center processors, is further solidifying its position in the high-growth AI market.

Investors should watch for Rackspace's Q2 earnings on July 28, 2026, and AMD's Q2 earnings on August 1, 2026, to gauge the initial impact of this partnership. Additionally, keep an eye on Rackspace's ongoing workforce reduction plan, announced alongside the AMD deal, as it may affect the company's operational efficiency and cost structure.