The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of shareholders who purchased or otherwise acquired Rackspace Technology, Inc. (“Rackspace” or the “Company”) (NASDAQ: RXT) securities between May 7, 2026 and July 8, 2026, inclusive (the “Class Period”).  Rackspace investors have until September 28, 2026 to file a lead plaintiff motion.

What Happened?

On July 9, 2026, Rackspace released preliminary second quarter 2026 financial results and lowered its 2026 outlook “[t]o account for [its] transition away from certain low-margin engagements that will be redeployed to [its] enterprise AI business.” The Company now estimates revenue midpoint at $2.5B (versus prior midpoint at $2.65B) and EBITDA midpoint at $290M (versus prior midpoint at $310M).

On this news, Rackspace’s stock price fell $2.21, or 33.6%, to close at $4.37 per share on July 9, 2026, thereby injuring investors.

What Is The Lawsuit About?

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s enterprise AI efforts would require Rackspace to significantly re-prioritize its capacity and capital away from the profitable Private Cloud segment; (2) that Rackspace’s Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms; (3) that, as a result, Rackspace was likely to significantly reduce a material portion of its Public Cloud infrastructure resale business; (4) as a result, the Company’s fiscal year 2026 revenue would be significantly impacted; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.