Rackspace Technology, Inc. is facing a securities class action in the U.S. District Court for the Southern District of New York on behalf of purchasers of its securities between May 7, 2026 and July 8, 2026, with a Sept. 28, 2026 deadline for investors seeking appointment as lead plaintiff. The complaint alleges Rackspace and certain senior executives misled investors by failing to disclose that enterprise AI efforts would require a significant reprioritization of capacity and capital away from the profitable Private Cloud segment, while Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms and the company was likely to reduce a material portion of its Public Cloud infrastructure resale business. According to the filings described by Rosen Law Firm and Bleichmar Fonti & Auld LLP, Rackspace later said its AI investments required significant resource reprioritization and a transition away from some revenue-generating businesses, cutting full-year 2026 revenue guidance by $150 million and its full-year Private Cloud revenue outlook by $25 million. Shares fell $2.21, or 33.6%, to $4.37 on July 9, 2026 from $6.58 the previous day.