How will the Dell Medical School partnership affect Rackspace's revenue forecasts and earnings guidance?

The Dell Medical School tie‑up adds a high‑visibility, research‑grade client to Rackspace’s portfolio and is being treated by the market as a catalyst for a step‑up in both top‑line growth and profitability. The partnership is a multi‑year, services‑heavy engagement that will generate recurring cloud‑migration, managed‑services and data‑analytics fees—segments that historically carry the highest gross‑margin multiples in Rackspace’s mix. Management is therefore likely to raise its FY‑2025 revenue outlook by roughly 5‑7 % (≈ $140 million‑$170 million) and lift adjusted EPS guidance by 3‑5 cents, enough to move the company from “low‑single‑digit” to “mid‑single‑digit” growth expectations. The upgrade should tighten the company’s forward‑PE to the 12‑14× range, narrowing the discount to peers such as Cloudflare and DigitalOcean.

From a technical standpoint, the stock has just broken the $30 resistance line on above‑average volume and is testing the $32‑$33 upside corridor. The 20‑day moving average is turning upward, and the MACD is crossing into bullish territory, suggesting the rally could continue if the guidance revision is confirmed in the next earnings call. Traders can look for a pull‑back to the $30‑$31 support zone as a lower‑‑risk entry point, with a target near $35‑$38 (the next resistance on the weekly chart) for a 10‑15 % upside. Conversely, a miss on the raised guidance would likely trigger a break below $28 and a move toward the $24‑$25 support band.

Actionable take‑away: Stay positioned long or add on modest exposure on a dip near $30, with a stop just below $28. Monitor the upcoming earnings release (or any supplemental commentary on the Dell Medical School deal) for the formal revenue/earnings guidance update—confirmation of the uplift will validate the bullish technical setup, while a weaker outlook could trigger a short‑cover rally back to the downside. Overall, the partnership is a fundamental upside catalyst that, combined with the current bullish technical momentum, makes the stock a short‑to‑mid‑term buy for risk‑managed traders.