Rackspace Technology Inc. (NASDAQ:RXT) continues to struggle as it has emerged as one of the worst-performing data center stocks in 2025. The company’s stock price has plummeted by over 45% in the past year alone, with little sign of recovery so far in 2025. Key challenges including diminishing growth rates, increasing losses, a scarcity of transformative deals, and high levels of debt have contributed to this downturn.
In response to these challenges, Rackspace is actively working to stabilize its private cloud revenue and boost its market position within mid-market and enterprise segments. Although there are positive indications in certain metrics and cash flow generation, the company must effectively implement its strategic plans to restore investor trust.
A significant development for the company came with the appointment of Gajen Kandiah as the new Chief Executive Officer on September 3. He takes over from Amar Maletira, who will stay on as the Vice Chairman of the Board. Gajen is set to steer the company towards an AI-first multi-cloud strategy, leveraging his extensive expertise in services, infrastructure, software, and artificial intelligence.
Additionally, on September 12, Rackspace revealed that it had achieved the prestigious Amazon Web Services (AWS) Automotive Competency designation. This accolade highlights the firm’s proficiency in driving digital transformation for automotive firms and their suppliers on the AWS platform.
Rackspace Technology Inc. (NASDAQ:RXT) is a renowned global provider of cloud and IT services, offering specialized solutions in multi-cloud environments, managed hosting, and data center infrastructure. The company aids enterprises in modernizing their operations across various platforms including AWS, Azure, Google Cloud, and private cloud solutions.
While Rackspace shows potential in the evolving tech landscape, investors might find more favorable opportunities in certain AI stocks, which are perceived to have higher upside and lower risk profiles. For those seeking an undervalued AI stock that could greatly benefit from ongoing market trends, we recommend checking out our free report on the best short-term AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
