Rackspace stock surges 13% on NVIDIA partnership announcement

Rackspace Technology stock surged 12.4% in pre-market trading after joining NVIDIA's Cloud Partner Program and launching its Institutional Sovereign Pod, integrating NVIDIA's Blackwell GPUs and Palantir's software. The company's stock is up to $3.641, still below its 52-week high of $8.60. The rally is attributed to company-specific news rather than broader market trends.

Piper Sandler initiated coverage of five AI chip stocks, rating them Overweight. Nvidia (NVDA) was given a $300 price target, with an 80% market share in AI compute. Broadcom (AVGO) was started at $460, with a 75% share in custom ASIC chips. AMD (AMD) was initiated at $600, with a 65% earnings growth forecast. Marvell (MRVL) and Arm Holdings (ARM) were also covered, with price targets of $270 and $320, respectively.

The US Justice Department is investigating Nvidia's acquisition of AI chip startup Groq, citing antitrust concerns, as reported by The New York Times and Reuters.

Nvidia (NVDA) expects 70% revenue growth next fiscal year, according to CFO Collette Kress. Analysts project $9.31 EPS for this year, suggesting $15.83 EPS if growth matches revenue. The stock trades at 29 times earnings, implying a potential $460 price if targets are met. NVDA is down 0.91% to $223.42.

The DOJ is investigating Nvidia's $17B deal with AI startup Groq for potential antitrust evasion. The agreement, structured as a licensing and talent acquisition, may have been designed to avoid regulatory review. Nvidia claims the deal promotes innovation, while the DOJ seeks information. Groq remains independent, and fines, not unwinding, are likely if wrongdoing is found.

The U.S. Justice Department is investigating Nvidia's licensing deal with AI startup Groq, according to the New York Times. The deal, announced last year, involved a $17 billion non-exclusive license to Groq's chip technology. Nvidia stated the deal promotes innovation, while the DOJ could impose fines if wrongdoing is found.