Updated from 11:16 a.m. EST:

NEW YORK (TheStreet) -- Shares of Rackspace (RAX)  were jumping 10.32% to $29.29 in late afternoon trading on Friday as the company is reportedly in talks with Apollo Global Management (APO) about a takeover offer. 

Apollo Global could acquire the San Antonio, TX-based data hosting technology company for more than $3.5 billion, according to sources cited by Reuters. However, there's no certainty that the discussions will result in a deal.

Rackspace has weighed a sale several times since announcing that it would work with Morgan Stanley to explore strategic alternatives two years ago, according to Reuters.

The New York City-based private equity firm has been trying to invest in the technology sector after traditionally taking stakes in industrial, media and communications companies, among other areas.

Apollo is also rumored to be a potential buyer of Hewlett Packard Enterprise (HPE), alongside other private equity firms like KKR and the Carlyle GroupFortune reports.  

Earlier this week, Apollo reported better-than-expected 2016 second quarter results with earnings of 91 cents per share on revenues of $660.45 million. Wall Street projected earnings of 42 cents per share and $402.67 million in revenue. 

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Income was boosted significantly by strong performance from its management business, as well as rebounds from its incentive business, Apollo said.

Shares of Apollo were up in late afternoon trading on Friday.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate RACKSPACE HOSTING INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

You can view the full analysis from the report here: RAX

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