Investors Face September Deadline in Rackspace Securities Class Action

The lawsuit, filed in the U.S. District Court for the Southern District of New York under the caption Morgan-Reed v. Rackspace Technology, Inc., claims that the company failed to disclose that its pivot toward enterprise AI would necessitate shifting capital away from its profitable Private Cloud segment. Plaintiffs further allege that Rackspace concealed declining revenue in its Public Cloud business as clients increasingly bypassed the firm to contract directly with hyperscale platforms.

These issues culminated on July 9, 2026, when Rackspace announced a $150 million reduction in its full-year revenue guidance and a $25 million cut to its Private Cloud outlook. Following the disclosure of these strategic shifts and the associated financial impact, Rackspace stock plummeted 33.6%, closing at $4.37 per share. Investors seeking to participate in the class action or pursue recovery options are encouraged to contact Kessler Topaz Meltzer & Check, LLP, though individuals retain the right to select their own counsel or remain absent class members.