Rackspace Technology, Inc. is facing a securities fraud class action covering investors who purchased or acquired its securities between May 7, 2026 and July 8, 2026, with a September 28, 2026 deadline to seek lead plaintiff status. The lawsuit, filed in the United States District Court for the Southern District of New York as Morgan-Reed v. Rackspace Technology, Inc., No. 1:26-cv-06491 (S.D.N.Y.), alleges the company made materially false or misleading statements, or omitted material facts, about its enterprise AI strategy and its effect on other parts of the business. The complaint says Rackspace failed to disclose that its enterprise AI efforts would require a significant re-prioritization of capacity and capital away from the profitable Private Cloud segment, that Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms, and that the company was likely to significantly reduce a material portion of its Public Cloud infrastructure resale business. It further alleges those issues would significantly affect fiscal year 2026 revenue. The case centers on Rackspace's July 9, 2026 disclosures, when the company reported second-quarter 2026 results, outlined its transition to operating the full enterprise AI stack, cut full-year 2026 revenue guidance by $150 million, lowered its full-year 2026 Private Cloud revenue outlook by $25 million, and said lower near-term margins reflected upfront growth investment and restructuring ahead of AI revenue ramping. Rackspace shares fell $2.21, or 33.6%, to close at $4.37 that day. A new Levi & Korsinsky notice reiterates the same class period and deadline and highlights a chronology in which Rackspace reaffirmed May guidance, disclosed a June workforce realignment affecting about 15% of its global workforce, and then reduced full-year revenue guidance on July 9, including a $125 million Public Cloud reduction tied to exiting low-margin resale as hyperscalers moved customers to direct contracts.