Rackspace Technology Cuts 2026 Outlook as $250M Stock Sale Fuels AI Push

Rackspace Technology is doubling down on enterprise AI infrastructure, launching a $250 million at-the-market equity offering to fund GPU-related growth and positioning itself as an operator of the “full enterprise AI stack.”

Management said the strategy emphasizes private cloud, regulated and sovereign deployments, and AI partnerships such as Palantir, AMD, VMware, Rubrik and Uniphore.

The company cut its 2026 outlook after exiting lower-margin public and private cloud revenue streams, with full-year revenue now expected at $2.45 billion to $2.55 billion and EBITDA at $285 million to $295 million.

Rackspace said the near-term hit reflects investing ahead of AI growth, with benefits from new deployments expected in 2027.

Rackspace outlined a multiyear GPU expansion plan that includes a first AMD-based deployment of nearly 2 megawatts by end-2026 and a target of 15 megawatts by end-2027 and 30 megawatts by end-2028.

Management expects revenue of $15 million to $20 million per megawatt on average, with EBITDA margins above 50%.

Rackspace’s AI Land Grab: Plugging Into the Next Compute Boom

Rackspace Technology NASDAQ: RXT said it is accelerating its push into enterprise artificial intelligence infrastructure, announcing a $250 million at-the-market equity offering and updated 2026 financial outlook as it moves away from lower-margin revenue streams.

On a conference call, Chief Executive Officer Gajen Kandiah said the company is working to become “the operator of the full enterprise AI stack,” with a focus on governed enterprise AI deployments for regulated industries and sovereign markets.

He said the company’s strategy centers on private cloud infrastructure, partnerships across the AI technology stack and Rackspace’s Forward Deployed Engine...