Rackspace Technology (RXT), an AI infrastructure solutions provider, saw its shares fall about 4% in premarket trading Thursday after the company lowered its full-year 2026 expectations, signaling that supply constraints and resource prioritization may weigh on near-term growth. The company now expects 2026 revenue of $2.45 billion to $2.55 billion, down from its previous $2.6 billion to $2.7 billion range, while adjusted EBITDA is expected to reach $285 million to $295 million, compared with the prior $305 million to $315 million outlook.
The update appears to place Rackspace below market expectations, with the new 2026 revenue midpoint of $2.5 billion trailing the $2.65 billion consensus estimate. For the second quarter, Rackspace expects preliminary revenue of $641 million to $649 million, below the $657.10 million consensus estimate, with Private Cloud revenue projected at $242 million to $246 million and Public Cloud revenue projected at $399 million to $403 million. The company also expects a non-GAAP loss per share of $0.11 to $0.08, compared with the consensus estimate for a $0.05 loss.
Rackspace is still framing enterprise AI as a longer-term opportunity, with plans to scale its Enterprise AI business to 15 MW of cumulative capacity by the end of 2027 and 30 MW by the end of 2028. Management expects $15 million to $20 million of annual revenue per MW deployed, implying $450 million to $600 million in annual revenue at full 30 MW Advanced Micro Devices NASDAQ:AMD, a chipmaker referenced in the deployment plan, capacity. The company also plans an at-the-market stock offering of up to $250 million, while expanding its agreement with Palantir Technologies NASDAQ:PLTR, a company whose Foundry and Artificial Intelligence Platform are being combined with Rackspace's cloud and managed operations framework for regulated and sovereign enterprises; Palantir shares dipped about 2% premarket.