Does Palantir Deal Still Warrant Buying RXT Shares?

While the aforementioned technical setup suggests RXT stock could pull back in the near-term, it’s still reasonable to consider investing in it at current levels.

Why? Because the PLTR agreement positions Rackspace as a critical implementation and managed services provider for enterprises seeking to deploy its Foundry and Artificial Intelligence Platform (AIP).

It effectively addresses a significant market gap where organizations struggle to extract meaningful value from AI platforms due to limited in-house expertise in deploying and operating systems at scale.

Over time, this strategic partnership could help Rackspace Technology improve its revenue growth and stabilize margins.

Where Options Data Suggests Rackspace Stock Is Headed

While RXT remains a penny stock, which often means higher risk, those following technical indicators should note that it now sits decisively above its key moving averages (MAs). This suggests that upward momentum could sustain in the near term as bulls have firmly taken control across multiple timeframes.

Additionally, derivatives data for Rackspace shares remains largely skewed to the upside. Options contracts expiring mid-May have the upper price set at $2.27 currently, indicating potential upside of another 60% from here.

It's also worth mentioning that RXT at just 0.12x sales is still an inexpensive name to own, especially given its commitment to transforming into a critical enabler of high-value AI workloads.

How Wall Street Recommends Playing Rackspace Technology

According to Barchart, some Wall Street firms also believe that Rackspace Technology could push higher still through the remainder of 2026.