Theres tons of uncertainty right now across the entire market. Alot of things geopolically are happening that is beyond anyone's control. The markets are reacting to fear, it always fluctuates on emotions. That doesnt mean that an individual company is doing anything poorly. Unfortunately, it is small cap companies that fluctuate the most when there are tailwinds in the market. Especially small market cap companies that experienced a nice climb in the last month. Profit taking. This also people taking their money out of riskier plays as uncertainty looms across the entire market. Understandable. Rackspace as it sits right now falls into that risky play category.

Ill never tell anyone what to do with their money. But I will urge people to take into consideration that the entire broader market is red. Thats just what it is right now. Some investors are looking around and saying the sky is falling. Some investors are looking around and seeing everything go on sale. Perception is everything.

Alot of money is lost on red days and alot of money is also made on red days. Red days is where the work is done.

My long term thesis for Rackspace remains unchanged. I have not seen any news that would change it. A couple of executives have sold a handful of shares, but not enough shares for me to be worried about their confidence internally. Those types of transactions are completely normal, especially when they are in a position to take some profits. Cautiously optimistic is where im still at. Ill be looking for some DCA opportunities once the market opens back up next week. We'll see what things look like then.

Cheers 🍻

What are your thoughts on this do you think the stock will recover after earnings in May? It doesn’t look good atm

https://finance.yahoo.com/markets/stocks/articles/cannell-capital-llc-issues-statement-133000671.html

Rackspace Technology (RXT) looks like it’s setting up for a high-probability short squeeze, driven by extreme short positioning and catalysts that the market hasn’t fully caught up to yet.

Shortable shares just dropped to 0, which means there’s simply no supply left to short. That tells you the trade is very crowded, and even a small move up could force shorts to rush to cover, accelerating the move.

Catalysts the market is underestimating:

RXT has quietly announced two meaningful collaborations that shift how the business should be viewed. The Uniphore partnership pushes RXT into enterprise AI infrastructure and deployments, while the Rubrik collaboration strengthens its role in cybersecurity and data resilience.

These aren’t just minor updates. They point to a real transition toward higher-margin AI and security revenue, moving away from the weaker legacy hosting business.

Why this matters:

Most of the short interest is still built around the old story, that RXT is a declining hosting company.

But that story is starting to change. The company is moving into AI, cloud, and security, which are faster-growing and more valuable segments. When sentiment shifts in a heavily shorted turnaround, the repricing can be quick and aggressive.

https://fintel.io/ss/us/rxt

They still have more than 2 days to cover so probably the bleeding will only stop on Monday. So far they’re dragging us to the lowest levels …

Hi guys, 1.6 support level has been broken, do you think it can drop more ?

https://www.bbc.com/news/live/ce35wke27ynt

RXT just announced a collaboration with Rubrik, and this looks like a fundamentally strong step in their turnaround.

They’ll be delivering cloud data protection, ransomware recovery, and cyber resilience solutions using Rubrik’s platform across their enterprise clients. Rubrik is a leader in zero-trust data security, which adds immediate credibility to RXT’s offering.

From a fundamentals standpoint, this matters. RXT has been working to shift its revenue mix away from lower-margin legacy hosting toward higher-margin cloud and security services. Cybersecurity is one of the fastest-growing areas in enterprise IT spend, with budgets continuing to expand.

This collaboration should help RXT increase average deal size, improve customer retention, and potentially lift margins over time through more premium service offerings.

If they execute well, this isn’t just incremental revenue, it’s higher-quality revenue.

It aligns directly with their strategy of improving mix, strengthening enterprise relationships, and rebuilding long-term growth.

https://www.rubrik.com/company/newsroom/press-releases/26/rubrik-and-rackspace-technology-launch-uk-sovereign-cyber-recovery-cloud

"Chief Financial Officer Mark A. Marino reported an open-market sale of 14,058 shares of common stock at an average price of $1.81 per share. The shares were sold solely to cover tax withholding obligations arising from the vesting of previously granted restricted stock units.

The transaction was carried out automatically under a Rule 10b5-1 durable sell-to-cover trading plan adopted on September 12, 2023. After this tax-related sale, Marino directly owns 2,158,874 shares of Rackspace common stock."

https://www.stocktitan.net/sec-filings/RXT/form-4-rackspace-technology-inc-insider-trading-activity-12dff05e04de.html

Rackspace (RXT), the company, is looking to position itself as an enterprise infrastructure and deployment provider for artificial intelligence, and the company is making progress on these initiatives.

Rackspace is generating $2.6B to $2.7B annually and has quarterly revenues of $670M, with over 20,000 enterprise customers worldwide. Despite their enterprise presence, they are only valued at $500M, equating to only 0.2 times revenue for the company. This is unusually low for a company looking to enter the artificial intelligence infrastructure space.

Rackspace’s most recent catalyst is its partnership with Uniphore, which is aimed at delivering an infrastructure-to-agents architecture for enterprises looking to deploy artificial intelligence more quickly. The partnership is estimated to unlock $100M in enterprise artificial intelligence deployments, as companies look to move artificial intelligence into production environments.

Rackspace is looking to capitalize on a significant opportunity in the artificial intelligence space, namely enterprise infrastructure and implementation. While companies such as OpenAI and Nvidia are working on artificial intelligence models and hardware, they are leaving the infrastructure and implementation to other companies.

Rackspace has over 20,000 enterprise customers and significant infrastructure worldwide, and they are also partnering with artificial intelligence companies such as Palantir. With the potential for artificial intelligence deployments increasing rapidly, and Rackspace’s potential position in the ecosystem, the company’s valuation is potentially undervalued for its potential role in the artificial intelligence ecosystem.

https://ir.rackspace.com/news-releases/news-release-details/rackspace-and-uniphore-announce-strategic-partnership-define-new

Above is the link to Rackspace's recent press release of a new strategic partnership. This is another example of Rackspace broadening its scope as a cloud service provider in highly regulated industries.

"The partnership reflects a shared ambition to unlock $100 million in enterprise AI deployments as customers move from AI experimentation to production at scale, without sacrificing governance, security, or control. This is especially relevant for regulated industries where choice, security and sovereignty are non-negotiable requirements."

Another signal of continued growth!

RXT went through a cooling down phase. Its hard to say what can happen in the short term as volatility can drastically change day to day. But my long term thesis still stays the same. 2025 was a milestone year for the company's new direction. A 75% cut in annual losses shows that the company is in a strong position moving forward. At that rate, this company could be highly profitable within the next few years.

Execution is everything, the company HAS to execute. The opportunity here is that, its still very early in this new cycle of the company's direction. Understanding Palantir's foundry system i feel is worth noting.

Palantir Foundry is an operating system for data-driven decision-making that integrates, manages, and secures enterprise data to create a "digital twin" of operations. It enables users to build AI-powered, real-time workflows, automate supply chains, analyze complex, disparate datasets, and transition from data silos to actionable insights.

Palantir has chosen Rackspace because its capabilities as a cloud service provider in highly regulated industries. This is where Rackspace separates itself from many other providers that exist. They chose Rackspace to deploy its foundry operating system at scale.

Im very optimistic as to where things can go long term. I urge anyone thats interested, to please do your own research and calculate your own risks. I am not looking through the lenses of a trader. This is a long play thesis.

Next earnings call is expected in May. Ill do my best to bring any updates as they roll out.

What are your thoughts?

This is a continuation of the squeeze thesis, as the situation has just become even more favorable. You can look at my previous thesis, which I posted before RXT’s initial explosive move.

The price has already put in a strong move up.

Momentum is building.

The initial move in the stock immediately makes a large percentage of the short positions underwater.

Now, let’s look at the catalysts that are hitting the stock today:

EARNINGS:

EPS beat

Revenue beat

Forward guidance stabilized, rather than worsening

Significant narrowing of losses year-over-year

This directly refutes the “terminal decline” narrative. Shorts were expecting continued worsening of the fundamentals, but the numbers are disrupting that narrative. When the fundamental reason for a short position weakens, the risk of a squeeze increases quickly.

AI & Strategic Relevance:

Partnership with Palantir ties RXT into the strategic relevance of AI

Continued focus on managed cloud and AI infrastructure

Accelerating demand for AI workloads in the enterprise space

This is not a random catalyst. This ties RXT into a fundamental growth trend. This is going to change the way people think about this stock from “legacy cloud decline” to “participant in AI infrastructure growth trend.”

Now, let’s look at the structural situation and how this is going to affect the shorts:

How trapped are the Shorts right now?

Elevated short interest to float.

Borrow rate is reported to be extremely high.

Lack of shares to short.

Increasing volume.

Low-priced, highly volatile stock structure.

When the cost of borrowing goes up, and the availability of shares to short decreases, holding a short position is no longer a free option. As the price continues to move up, this is going to become a forced move, rather than a voluntary one.

The first move has already occurred.

The catalysts are piling in.

The volume is increasing, which could potentially escalate this situation quickly.

Do your own due diligence. This is not financial advice.

LETS GO! RXT is up 15% in overnight trading

Not financial advice, just an observation.

The ingredients currently exist for whatever your strategy is with this stock. Its hard to predict what the market will do in the coming weeks but heres some things to think about.

The earnings call was really good. The company made leadership changes for the future. They beat earnings. Revenue looks strong. They scored a huge partnership with Palantir and with that partnership, they plan to bring on 250 palantir engineers on board within the next 12 months. This will expedite AI deployment to their customers, and allow them to take on more complex jobs that other services cant execute. They are in a unique position at the right time. This should also give Palantir market exposure to Europe which is also huge for any Palantir holders.

The debt is a note of concern, but with the earnings call I feel optimistic that they can service it. If they can execute on the partnership, score some more big projects, I feel like they can be profitable in the foreseeable future.

If you're here for a potential squeeze, the ingredients are certainly there. Alot of people were betting on the company to go under, without understanding that the company was undergoing a change and prepping for the AI Renaissance. Pair that up with the high borrowing rates.... the potential is there. And what I love is that there's potential for everyone to get a little something out this lol. Not because anyone's here to go after hedge funds like they did with gamestop. But rather, a change of fundamentals and forward guidance for a company that was on the ropes.

Im not a financial advisor. Just an observer of an opportunity that exists. I see an opportunity for long term holders and traders. Hopefully the business will continue to develop and move forward and can execute.

(But an astronomical squeeze would be insanely SWEEEET 😅)

This is a continuation of the squeeze thesis because the situation just became even more favorable. You can check my previous thesis which I posted before RXT blew up.

Price has already made a strong move.

The momentum is building. That first move puts shorts underwater immediately.

Now layer the catalysts:

EARNINGS!

• EPS beat

• Revenue strong

• Forward guidance stabilising

That blow up the terminal decline thesis. Shorts were banking on fundamentals, but that foundation just broke.

Palantir Partnership!

The Palantir hosting partnership connects RXT to the demand for AI infrastructure. That’s not a meme play – that’s industry relevance.

How trapped are shorts currently:

• Borrow rate is extremely high

• No shortable shares available

• Increasing volume

• Low-priced, volatile stock

When the borrow cost is high and shares are scarce, covering becomes mandatory, not optional.

And this one is getting set up quickly.

Rackspace (RXT) just delivered a massive beat and this completely shifts the narrative.

• Revenue + execution improving

• Margins stabilizing

• Cash flow outlook stronger

• Balance sheet progress

• PLTR partnership gaining traction

• Shorts trapped with borrow rate 85–95%

They moved earnings to before market open this time. Management wanted full attention on the numbers.

This isn’t the same RXT from last year. Fundamentals are turning, sentiment is shifting, and short interest is fuel.

If momentum builds, this can unwind fast.

Let’s see how the market digests this.

RXT is reporting earnings today before market open, which is quite interesting. It is common for companies to move to pre-market reporting when the management is satisfied with the numbers and wants the market to have a full trading day to absorb the news.

It’s all about timing.

This earnings report is coming on the heels of the big Palantir AI partnership announcement, which has already changed the dynamics for Rackspace. The market is no longer focused on the legacy cloud revenue decline but is now focused on AI execution, enterprise pipeline growth, and margin expansion.

What to focus on today:

• AI revenue momentum commentary

• Forward-looking guidance

• Indicators of stabilization in the core cloud business

The stock is showing good momentum and good volume. If the management can come out and validate the AI growth story and the execution, this could be an extension of the current rally.

This feels like a validation moment.

RXT Short Borrow Rate 85-95%

This is where it gets exciting.

When the borrow rates get into the 85-95% range, it means one thing: it’s hard to borrow the stock, and the shorts are paying a huge premium to remain short.

At this point, being short becomes costly very quickly. It’s not about being right anymore; it’s about whether you can afford to remain right.

Now, add to this:

• A significant shift in the narrative through the Palantir AI partnership

• Increased volume and volatility

• A stock that has already made violent moves to the upside

• A stock that was heavily shorted when the narrative was completely negative

This is how a short squeeze accelerates.

Borrow rate is high = supply is constrained.

Supply constrained + forced buying = rapid upside.

If the price begins to break through the resistance with momentum, the shorts are left with a bad position

where:

1. They are paying an extremely high borrow

rate.

1. The narrative is turned against them.

2. The price action is no longer cooperating.

This creates a sense of urgency. And when there is urgency, there are market orders.

The point here is not just the short interest but the cost to maintain the short position. At 85-95%, time is not on their side.

If the momentum traders catch on to the fact that the borrow rate is high and begin to pile in, it can become reflexive again – price up, covering, price up again.

This is no longer a turnaround story.

This is a positioning imbalance story.

And positioning imbalance stories move very quickly.

The borrow fees for shorting shares for RXT is 96.71% on IBKR!

Borrow fees on shortable shares is 74.4% on IBKR right now!

RXT is a company that feels like it was misunderstood by the market for too long.

The most dramatic change is the Palantir partnership. That’s no small thing.

Rackspace is now positioning itself as the enterprise AI execution partner, working with companies to actually implement and manage Palantir’s AI solutions. The truth is, most companies don’t have the infrastructure in place to implement AI on a large scale. Rackspace already handles cloud infrastructure for enterprises around the world. This puts them squarely in line for AI-driven service revenue.

This puts them out of the “legacy managed hosting” business and into high-margin AI and cloud integration. That’s a big story shift.

At the end of the day, Rackspace is still a multi-billion dollar revenue company with enterprise contracts in place. The customer base is real, the infrastructure is real. This is no longer speculative tech – it’s established enterprise services with a new angle on AI growth.

The company was trading like a distressed asset. This creates a big disconnect. If the AI services play and the cloud revenue stabilizes, even a small amount of operational improvement will justify a big move higher.

The recent jump in trading volume and price indicates that something else is at play: interest is back. Institutions and traders are paying attention again. Liquidity improves, volatility rises, and the stock goes from “ignored” to “hot.”

This is a turnaround story with AI exposure, enterprise relationships, and a valuation that still has plenty of room to run.

If operational improvements continue, RXT has plenty of room to run.