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Shares of Lumen Technologies (LUMN) skyrocketed Tuesday, a day after the telecom provider announced it had secured $5 billion in new business because of soaring demand for artificial intelligence (AI) connectivity products.
Lumen (LUMN) secures $5 billion in new business driven by AI demand for massive internet expansion and creates a Custom Networks division to better serve large organizations.
The stock soared after the telecommunications company secured $5 billion in deals amid surging demand for AI.
Lumen Creates Custom Networks Division to Meet New Demand DENVER , Aug. 5, 2024 /PRNewswire/ -- Lumen Technologies (NYSE: LUMN) today announced it has secured $5 billion in new business driven by major demand for connectivity fueled by AI. Large companies across industry sectors are seeking to secure fiber capacity quickly, as this resource becomes increasingly valuable and potentially limited, due to booming AI needs.
Beyond analysts' top -and-bottom-line estimates for Lumen (LUMN), evaluate projections for some of its key metrics to gain a better insight into how the business might have performed for the quarter ended June 2024.
Lumen Technologies, Inc.'s stock surged on deals with Corning and Microsoft, but these are supplier and partner deals, not major customer agreements. Despite investing in fiber network capacity for AI traffic, Lumen's financials remain weak with ongoing revenue declines and high debt levels. Lumen's recent rally is unwarranted, and investors should be cautious as the company is unlikely to see significant sales growth or positive cash flows.
Lumen Technologies, Inc. LUMN has announced its largest cable purchase deal with Corning Incorporated, aiming to more than double its intercity network miles to advance AI capabilities for cloud data centers, enterprises and public agencies. This agreement secures 10% of Corning's global fiber capacity for Lumen over the next two years.
Lumen's (LUMN) Q2 performance is likely to have been hurt by a time-consuming digital transformation process. Continued investments in Quantum Fiber and enterprise businesses are expected to have been a tailwind.
Lumen announced a partnership with Corning Incorporated to supply fiber for its growth plans. It also announced a recent partnership with Microsoft.
Lumen stock's value briefly increased by more than a third today. The company's share price soared after a new deal for fiber-optic cable with Corning was announced.