Key insights
- The author expresses skepticism about RXT despite its recent surge, citing high debt, negative equity, a non-binding AMD partnership, and analyst price targets significantly below the current price. The author suggests the stock is overvalued and that early investors have likely already exited, implying a potential correction.
Stock did 74% Thursday and 56% Friday. Back to back. That kind of move deserves a closer look before you do anything with it.
The story is actually decent. Hospitals and banks can't legally run AI on shared AWS infrastructure. RXT builds the private governed version of that. They beat earnings, posted their first real profit in years, and announced an AMD partnership all on the same day.
But here's what's bothering me. $3.1B in debt against $2.8B in total assets. Negative equity. The AMD deal is still non-binding. And every analyst on Wall Street had a price target under $2.50 while this thing closed at $5.49 Friday.
It went from $2.27 to $5.49 in 48 hours. The people who bought at 39 cents are already out.
The turnaround might be real. But at this price you're not getting in early on anything.
NFA, do your own research.