Rackspace Technology shares rose as much as 10% in Monday trading, extending a powerful run that accelerated late last week. The stock posted a 56% jump on Friday and has gained more than 200% since the company released earnings and announced a strategic arrangement with AMD on May 7.
The recent price action appears to be influenced in part by substantial short interest in the name. According to the most recently published data, 24.55% of Rackspace Technology's float was held short and the days to cover stood at 3.1. Those metrics are consistent with a market environment in which short covering can amplify upward moves when sentiment or news changes.
On May 7, Rackspace Technology and AMD unveiled a Memorandum of Understanding that lays out the framework for a multiyear strategic partnership. The stated objective of the collaboration is to create an Enterprise AI Cloud tailored to regulated enterprises and sovereign workloads. Under the terms described in the memorandum, the effort will integrate AMD Instinct GPUs and EPYC CPUs into a fully managed, governed technology stack. Rackspace will retain ownership of the stack - described as ranging from silicon to outcomes - providing a managed solution built around AMD silicon.
The combination of the earnings release and the AMD announcement has coincided with rapid gains in the company's stock price over a relatively short period. Market participants tracking short interest and days-to-cover data flagged the potential for short covering to contribute to volatility in the shares, given the elevated percentage of the float sold short.
Context limitation - The material here reflects the reported moves in the stock, the short-interest statistics as published, and the terms of the Memorandum of Understanding between Rackspace Technology and AMD as stated. No additional outcomes, timelines, or forecasts were provided in the source material.