12 Best Cloud Computing Stocks to Buy According to Analysts

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8) Rackspace Technology, Inc. (NASDAQ:RXT)

Number of Hedge Fund Holders: 13

Average Upside Potential: 15.8%

Rackspace Technology, Inc. (NASDAQ:RXT) operates as a multi-cloud technology services company. The company provides a wide range of cloud-related services, such as cloud migration, managed cloud services, and cloud optimization among other services. Rackspace Technology, Inc. (NASDAQ:RXT)’s Public Cloud segment has been regarded as a crucial growth driver. This segment supports companies in optimizing and managing their workloads and applications on public cloud platforms including Amazon Web Services (AWS) and Microsoft Azure.

The record bookings seen in this division in Q3 2024 demonstrate the elevated demand for the company’s cloud infrastructure and services offerings. The strength of Public Cloud was mainly evident in infrastructure and services, highlighting that the company is successfully capitalizing on the ongoing shift towards cloud-based solutions across industries. With businesses continuing to migrate to cloud-based solutions, Rackspace Technology, Inc. (NASDAQ:RXT)’s expertise in multi-cloud services is expected to result in higher market share and revenue growth. The company’s emphasis on improving its Public Cloud offerings aligns with industry trends, potentially enabling Rackspace Technology, Inc. (NASDAQ:RXT) to capture a significant portion of the growing cloud services market.

Several factors drove the strong performance of the Public Cloud segment in Q3 2024. First, structural changes were made in the go-to-market in late 2023, including transitioning to services-led motion and building a client-partner model. Second, expansion in mid-market while selectively penetrating the enterprise segment, which led to signing more than 10 master service agreements and continuing to focus on additional ones that will generate new growth opportunities. Finally, a disciplined approach to infrastructure resale, where Rackspace Technology, Inc. (NASDAQ:RXT) focused on deals meeting its return hurdles.

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