--- title: "Rackspace triples capex to $104 million with $92 million of fresh stock while AMD commits to buy nothing yet" description: "The filing will not say how much of the quarter's $104 million of capital spending went to the AMD GPU build, and the AMD agreement commits the chipmaker to nothing up front: for an agreed deployment it would buy only residual unsold capacity, capped per deployment. Rackspace bridged the quarter with $92 million of newly issued stock while the cloud business that must pay for it shrank 17.2%." publisher: "The Inference" section: "Data Center" published: 2026-11-10T19:13:50.993Z modified: 2026-11-10T19:13:50.993Z canonical: https://theinference.org/article/rackspace-triples-capex-to-104-million-with-92-million-of-fresh-stock-while-amd-commits-to-buy-nothing-yet language: en keywords: "Rackspace, AMD, Data Center, AI Infrastructure, GPU" --- # Rackspace triples capex to $104 million with $92 million of fresh stock while AMD commits to buy nothing yet > The filing will not say how much of the quarter's $104 million of capital spending went to the AMD GPU build, and the AMD agreement commits the chipmaker to nothing up front: for an agreed deployment it would buy only residual unsold capacity, capped per deployment. Rackspace bridged the quarter with $92 million of newly issued stock while the cloud business that must pay for it shrank 17.2%. [Rackspace Technology](https://theinference.org/markets/companies/rackspace-technology) (Nasdaq: RXT) released third-quarter results at 4:21 p.m [1]. Eastern on November 9, 21 minutes after the closing bell left the stock up 8.3% [1]. By late the next morning, with the earnings call underway, it traded at $2.55, down 6.4% [2]. ## The raise is real; the AMD terms stay conditional The release was a beat-and-raise: full-year 2026 revenue guidance up $35 million at the midpoint, to $2.51 billion to $2.56 billion, profit targets unchanged [1]. The arrangement underneath sits in the 10-Q, [the quarterly report filed with the Securities and Exchange Commission](https://www.stocktitan.net/sec-filings/RXT/10-q-rackspace-technology-inc-quarterly-earnings-report-75c22ae6b556.html): a GPU-as-a-Service framework with [AMD](https://theinference.org/markets/companies/amd) covering an initial 30 megawatts of Instinct GPU and EPYC processor capacity across Rackspace data centers, subject to "financing, operational and legal conditions" [3]. It sets no minimum AMD purchases, guarantees no deployments, and prices each deployment in a separately negotiated agreement [3]. For an agreed deployment, AMD would buy only residual unsold capacity, capped for that deployment, and it holds a right of first refusal before Rackspace sells capacity below a price threshold [3]. ## Capex tripled, and the filing allocates none of it [Capital expenditures were $104 million](https://finance.yahoo.com/technology/articles/rackspace-technology-reports-third-quarter-212100908.html), triple the $34 million of a year earlier and up from $28 million in the second quarter [1][4]. The release assigns no dollar to any project, and nothing in the quarterly results connects the spending to the AMD rollout [4]. Of nine-month purchases of property and software, $65.8 million was paid in cash; another $101.4 million ran through leases, accruals and stock [1]. ## The build runs on $92 million of stock The equity trail, four months deep: $66.0 million in cash from an investor group led by the investment firm Voss Capital for 24.0 million shares issued November 9, the day of the filing, about $2.75 each; 3.8 million shares to [Palantir](https://theinference.org/markets/companies/palantir), the data-analytics software company, on October 1 as $14.7 million of non-cash consideration, with the filing not spelling out what the shares paid for; and $11.1 million net from at-the-market sales, stock issued piecemeal into the open market [5]. *Chart: **$92 million of equity in four months; $66 million arrived the day of the filing** Bar chart of equity Rackspace issued from July to November 9, 2026: Voss-led group $66 million, Palantir shares $14.7 million, at-the-market sales $11.1 million* *Equity issued July through November 9, 2026, in millions of dollars; Palantir shares were non-cash consideration. Source: Rackspace 10-Q. [5]* That paper stands behind $108 million of cash, $2,306.3 million of principal debt, a revolving credit line drawn to $290 million of its $375 million, and nine-month operating cash flow of $9.3 million, down from $91.7 million [5]. A cut of roughly 15% of the global workforce carries $14 million to $19 million of one-time cost [5]; the [stockholders' deficit widened](https://kalkine.com/news/announcements/rackspace-technology-q3-2026-deficit-widens-to-131b) to $1,307.3 million [6]. ## The engine that pays for it is shrinking [Public Cloud revenue fell 17.2%](https://www.quiverquant.com/news/Rackspace+Technology+Reports+%24609+Million+Q3+Revenue+and+%2454+Million+Net+Loss) to $349.1 million while Private Cloud rose 4.2% to $260.0 million, and interest expense climbed 67.5% to $35.5 million [1]. Insiders made ten open-market sales in six months and no purchases; Chief Executive Gajen Kandiah accounted for two of them, 506,986 shares for about $1.6 million [7]. *Chart: **Revenue drifted down for three years, then broke: $609M in Q3 2026** Line chart of Rackspace Technology quarterly revenue, Q4 2023 through Q3 2026, falling from about $720 million to $609 million* *Quarterly GAAP revenue in millions of dollars, per Rackspace's SEC filings. [8]* ## Management's targets are real, and each hinges on financing The improvement is genuine: net loss narrowed to $53.5 million from $67.1 million, and non-GAAP operating profit, which strips out restructuring charges, stock-based pay and acquired-intangible amortization, rose 12% to $36 million [1]. On the call, management [targeted 20 to 22 cumulative megawatts](https://seekingalpha.com/news/4669959-rackspace-targets-20-to-22-megawatts-of-ai-compute-by-end-of-2027-as-it-raises-2026-revenue) by the end of 2027 and $420 million to $460 million of annualized run-rate revenue at EBITDA margins above 60% once fully deployed, contingent on financing [2]. It also said it was too early to know whether demand would bring pricing power [2]. The record behind those targets: $104 million spent, none of it assigned to the AMD build [1][4]; $92 million of stock in four months [5]; AMD committed to nothing until a deployment is signed [3]. The tell is the first deployment agreement with separately negotiated pricing. That document, not the guidance, turns the framework into a business. ## Takeaway Rackspace tripled capex and issued $92 million of stock, but its AMD agreement commits the chipmaker to nothing until a deployment is signed; the 10-Q assigns none of the spending to the GPU build. ## Sources 1. [Yahoo Finance / GlobeNewswire, Rackspace Technology Reports Third Quarter 2026 Results, 9 November 2026](https://finance.yahoo.com/technology/articles/rackspace-technology-reports-third-quarter-212100908.html) 2. [Seeking Alpha, Rackspace targets 20 to 22 megawatts of AI compute by end of 2027 as it raises 2026 revenue outlook, 10 November 2026](https://seekingalpha.com/news/4669959-rackspace-targets-20-to-22-megawatts-of-ai-compute-by-end-of-2027-as-it-raises-2026-revenue) 3. [Compute Labs Research, Rackspace (RXT) AMD framework covering a conditional 30-MW data-center footprint with no minimum purchases, 9 November 2026](https://www.computelabs.ai/research/2026-11-09/rackspace-rxt-amd-framework-covering-conditional-30-mw-data-center-footprint-no) 4. [Chip Dispatch, Rackspace lifts capex to $104 million as public cloud sales drop 17%, 10 November 2026](https://chipdispatch.com/articles/rackspace-lifts-capex-to-104-million-as-public-cloud-sales-drop-17) 5. [StockTitan, Rackspace Technology Form 10-Q for the quarter ended September 30, 2026, 9 November 2026](https://www.stocktitan.net/sec-filings/RXT/10-q-rackspace-technology-inc-quarterly-earnings-report-75c22ae6b556.html) 6. [Kalkine, Rackspace Technology Q3 2026: Deficit Widens to $1.31B, November 2026](https://kalkine.com/news/announcements/rackspace-technology-q3-2026-deficit-widens-to-131b) 7. [Quiver Quantitative, Rackspace Technology Reports $609 Million Q3 Revenue and $54 Million Net Loss, 9 November 2026](https://www.quiverquant.com/news/Rackspace+Technology+Reports+%24609+Million+Q3+Revenue+and+%2454+Million+Net+Loss) 8. [SEC EDGAR, Rackspace Technology quarterly figures from its SEC filings, retrieved 10 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001810019) --- Rackspace triples capex to $104 million with $92 million of fresh stock while AMD commits to buy nothing yet — The Inference. Canonical: https://theinference.org/article/rackspace-triples-capex-to-104-million-with-92-million-of-fresh-stock-while-amd-commits-to-buy-nothing-yet