Rackspace Technology's Enterprise AI Buildout Could Generate Up to $600 Million in Annual Revenue, RBC Says

Rackspace Technology (RXT) may generate $450 million to $600 million in annual enterprise AI revenue at full deployment by 2028, driven by expanded GPU infrastructure under its partnership with Advanced Micro Devices (AMD), with adjusted earnings before interest, taxes, depreciation and amortization margins topping 50%, RBC Capital Markets said in a Thursday research note.., Rackspace's planned $250 million at-the-market offering and asset-backed financing are expected to fund its AI expansion, while its lower fiscal 2026 guidance reflects a shift toward higher-margin enterprise AI deployments rather than weaker demand. RBC lowered its 2026 estimates to reflect the updated outlook, the planned exit from certain businesses, and expected contributions from the GPU deployment. The brokerage said Rackspace's expanded partnership with Palantir Technologies (PLTR) enhances its ability to deliver AI infrastructure and managed services to regulated sectors, including healthcare, financial services and energy. RBC maintained its sector perform rating and $4 price target on the stock. Rackspace Technology shares were up 9.7% in Friday trading. Price: $4.76,.