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SAN ANTONIO - Rackspace Technology (NASDAQ:RXT), a cloud solutions provider with annual revenue of $2.71 billion, announced Thursday that the Science Based Targets Initiative (SBTi) has approved its emissions reduction goals, including commitments to cut emissions by 50% by 2032 and 90% by 2045.
The cloud and AI solutions provider said its targets align with SBTi’s objective of limiting global warming to 1.5°C, using 2023 as the benchmark year for measurement.
Currently, Rackspace powers approximately 80% of its global data centers with renewable energy and is working toward reaching 100% through partnerships, according to the company’s press release.
"SBTi’s validation of our net-zero targets is a significant milestone in Rackspace’s decarbonization journey," said Srini Koushik, President of AI, Technology, and Sustainability at Rackspace Technology.
The company noted that global energy consumption from data centers is projected to more than double by 2030, with artificial intelligence being a major driver of increased demand.
Rackspace stated that its customers are reducing their cloud carbon footprint through the company’s Workload Aware Modernization program, which identifies underutilized cloud resources to improve environmental sustainability.
The announcement comes as companies face increasing regulatory pressure, such as the EU’s Corporate Sustainability Reporting Directive, to disclose and reduce carbon emissions across their supply chains.
Rackspace Technology provides hybrid cloud and AI solutions, designing, building, and operating cloud environments across major technology platforms. The stock has experienced significant volatility with a beta of 2.06 and has declined over 45% year-to-date. For deeper insights into RXT’s valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed financial analysis and expert recommendations.
In other recent news, Rackspace Technology reported its Q1 2025 earnings, revealing a non-GAAP loss per share of $0.06, which was slightly better than the forecasted loss of $0.0762. The company’s revenue reached $665 million, surpassing the forecast of $658.68 million. RBC Capital Markets responded by reducing its price target for Rackspace from $3.00 to $2.00, while maintaining a Sector Perform rating, highlighting the company’s continued momentum and solid results. Raymond James analysts downgraded Rackspace’s stock rating from Outperform to Market Perform, noting a longer-than-expected path to improved growth and free cash flow. Despite these mixed analyst views, Rackspace’s total bookings for the quarter increased by 9% year-over-year. Additionally, Rackspace launched its Foundry for AI by Rackspace (FAIR) Model Context Protocol Enterprise Accelerator on the AWS Marketplace, aiming to assist organizations in deploying AI agents. A recent Rackspace study revealed that only 13% of organizations are classified as "AI Leaders," achieving significantly better results from their AI investments. These developments suggest Rackspace is actively pursuing growth in its AI offerings while navigating analyst evaluations.
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