Rackspace Technology, Inc. Class Action Lawsuit - RXT
Case Summary
Investors who suffered a loss and would like to learn more, click here to contact us.
The Rackspace class action lawsuit seeks to represent purchasers or acquirers of Rackspace Technology, Inc. (NASDAQ: RXT) securities between May 7, 2026 and July 8, 2026, inclusive (the “Class Period”). Captioned Morgan-Reed v. Rackspace Technology, Inc., No. 26-cv-06491 (S.D.N.Y.), the Rackspace class action lawsuit charges Rackspace and certain of Rackspace’s top executives with violations of the Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Rackspace class action lawsuit, please provide your information in the form on this page. You can also contact attorneys Ken Dolitsky or Michael Albert of Robbins Geller by calling 800/851-7783 or via e-mail at info@rgrdlaw.com. Lead plaintiff motions for the Rackspace class action lawsuit must be filed with the court no later than September 28, 2026.
CASE ALLEGATIONS: Rackspace is a hybrid cloud and AI solutions company that owns and operates physical infrastructure to host cloud services and artificial intelligence. Its Private Cloud segment offers programmatic infrastructure, cloud operating systems, platform-as-a-service, as well as cloud services tailored toward specific use cases. Its Public Cloud segment bundles public cloud infrastructure with Rackspace’s expertise and managed services to deploy customers’ applications on the public cloud platforms. Rackspace also provides Rackspace AI, a portfolio of AI services and solutions to help organizations scale AI adoption.
The Rackspace class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Rackspace’s enterprise AI efforts would require Rackspace to significantly re-prioritize its capacity and capital away from the profitable Private Cloud segment; (ii) Rackspace’s Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms; (iii) as a result, Rackspace was likely to significantly reduce a material portion of its Public Cloud infrastructure resale business; and (iv) as a result, Rackspace’s fiscal year 2026 revenue would be significantly impacted.
On July 9, 2026, before the market opened, Rackspace published second quarter 2026 financial results and “a strategic and financial update on its transition to becoming the operator of the full enterprise AI stack.” Rackspace allegedly revealed that its AI investments would require a significant re-prioritization of resources and, as a result, reduced its full year 2026 revenue guidance by $150 million. The Rackspace class action lawsuit further alleges that Rackspace also cut its full year 2026 Private Cloud revenue outlook by $25 million and explained that “[l]ower near-term margins reflect upfront growth investment and restructuring, ahead of AI revenue ramping.” On this news, the price of Rackspace stock dropped nearly 34%, according to the complaint.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired Rackspace securities during the Class Period to seek appointment as lead plaintiff in the Rackspace class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Rackspace class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Rackspace class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Rackspace class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities fraud and shareholder rights litigation. Our Firm ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report, recovering more than $916 million for investors in 2025. This marks our fourth #1 ranking in the past five years. And in those five years alone, Robbins Geller recovered $8.4 billion for investors – $3.4 billion more than any other law firm. With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world, and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest ever – $7.2 billion – in In re Enron Corp. Sec. Litig.