If you have suffered a loss on your Rackspace Technology, Inc. (“Rackspace” or the “Company”) (NASDAQ: RXT) investment, contact Lauren Molinaro of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below to discuss your rights or interests in the securities fraud class action lawsuit at no cost.

Investors have until September 28, 2026 to ask the Court to appoint them as lead plaintiff. Courts do not consider applications filed after this deadline. The lead plaintiff oversees the litigation on behalf of the class and may influence key decisions, including litigation strategy and settlement. Courts regularly appoint individual investors as lead plaintiffs, not only institutions. Learn more about the lead plaintiff process and eligibility requirements here.

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What Is The Lawsuit About?

The lawsuit has been filed on behalf of investors who purchased securities during the period of May 7, 2026 and July 8, 2026, inclusive (“the Class Period”). The lawsuit alleges that Rackspace made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects as it failed to disclose to investors that (i) the Company’s enterprise AI efforts would require Rackspace to significantly re-prioritize its capacity and capital away from the profitable Private Cloud segment; (ii) Rackspace’s Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms; (iii) as a result, Rackspace was likely to significantly reduce a material portion of its Public Cloud infrastructure resale business; and (iv) as a result, the Company’s fiscal year 2026 revenue would be significantly impacted.

On May 7, 2026, Rackspace announced a partnership with AMD to create an enterprise AI cloud The same day, the Company reaffirmed the fiscal 2026 guidance that had been provided in February and held an earnings call where management described Rackspace’s growth and readiness for its new AI pivot, as well as purported details of the mechanics of the AMD deal.

On June 16, 2026, the Company announcing a workforce realignment plan “intended to accelerate the Company’s strategic transformation as the operator for governed enterprise AI” whereby the Company said it expected to realize “$75 million to $85 million in annualized run-rate savings compared to current expense levels.” This plan included a 15% reduction in workforce.

On July 9, 2026, Rackspace published its second quarter 2026 financial results and “a strategic and financial update on its transition to becoming the operator of the full enterprise AI stack” and held an earnings call to discuss results. The Company revealed that its AI investments would require a significant re-prioritization of resources, reduced its full year 2026 revenue guidance by $150 million, and reduced its full year 2026 Private Cloud revenue outlook by $25 million, “given the low-margin nature of the exited revenues across both business units and investments in AI compute capacity.” Management further explained that the reduced guidance was in part due to the decision to “redeploy [] capacity and capital towards higher-yielding AI deployments.” Management also stated that “We are reducing our public cloud revenue estimate for 2026 by $125 million, driven by this decision to exit low-margin public cloud infrastructure resale revenue and a continuation of the trend of hyperscaler direct contracting.” Finally, the Company explained that “[l]ower near-term margins reflect upfront growth investment and restructuring, ahead of AI revenue ramping.” On this news, Rackspace’s stock price fell $2.21, or 33.6%, to close at $4.37 per share on July 9, 2026.

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What Should I Do?

If you purchased or otherwise acquired Rackspace securities, have information, or would like to learn more about this investigation, please contact Lauren Molinaro of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below, to discuss your rights or interests with respect to these matters at no cost.

[WHAT IS A SECURITIES CLASS ACTION?]

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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