Why Are Rackspace Technology Shares Surging Friday?

Rackspace Technology, Inc. (NASDAQ:RXT) is pushing higher on Friday. Nasdaq index is up 0.93% while S&P 500 is up 0.53%.

On Wednesday’s the company announced of a strategic partnership with data-giant Palantir Technologies, Inc. (NASDAQ:PLTR), designed to accelerate deployment of Palantir’s Foundry and Artificial Intelligence Platform (AIP).

Under the deal, Rackspace will host Palantir’s software within its Private Cloud and UK Sovereign data centers, targeting highly regulated industries wary of the public cloud.

The company currently has 30 Palantir-trained engineers and has pledged to scale that to 250 within 12 months.

Technical Analysis

RXT is trading 112.1% above its 20-day SMA and 21.7% above its 100-day SMA, showing a sharp short-term extension on top of improving intermediate trend. Shares are down 57.47% over the past 12 months and sit closer to their 52-week low of 39 cents than the 52-week high of $3.03, even after the recent rebound.

The RSI stands at 70.05, indicating that the stock is in the overbought territory, which could suggest a potential pullback or consolidation in the near term. Meanwhile, the MACD presents a bullish signal, with the MACD line at -0.0089 above the signal line at -0.1002

• Key Resistance: $1.50
• Key Support: $1.00

Earnings & Analyst Outlook

The countdown is on: Rackspace Technology is set to report earnings on Feb. 26.

• EPS Estimate: Loss of 1 cent (Up from Loss of 2 cents YoY)
• Revenue Estimate: $672.56 million (Down from $685.60 million YoY)
• Valuation: P/E ratio not provided (profitability-based P/E may be less informative while earnings are negative)

RXT Price Action: Rackspace Technology shares were up 42.00% at $1.73 at the time of publication on Friday, according to Benzinga Pro data.

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