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To: Johnny Canuck who wrote (59618)

8/6/2024 11:01:43 AM

From: Johnny Canuck

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Lumen Technologies Stock Jumps 50%. 3 Reasons Why.The stock soared after the telecommunications company secured $5 billion in deals amid surging demand for AI.

By

Elsa Ohlen

Aug. 6, 2024 7:44 am ET

Telecommunications firm Lumen Technologies said there’s a surge in demand for its connectivity services fueled by artificial intelligence.
Courtesy IBM

Lumen Technologies shares soared after the telecommunications company said it had secured $5 billion in new deals. And there’s a raft of other positive news that seems to be driving the stock.
First off, the additional $5 billion to its order book has been driven by a surge in demand for products that are fueled by artificial intelligence, the company said in a statement on Monday.

“The AI economy is changing business operations, and companies are recognizing they need powerful network infrastructure to manage the unprecedented data flows today and the demand in the future,” CEO Kate Johnson said.
The broadband provider, which offers secure fiber connections which it describes as being ‘AI ready’, recently struck deals with tech giant Microsoft which will use Lumen’s network equipment to for its data centers.
The second positive piece of news is that the telecoms company said that it is in “active discussions” with customers to secure another $7 billion in sales. Lumen said this that due to this growing demand it will more than double its miles of networks inbetween cities over the next five years.
Given the big increase in demand for its business investors will be hoping management might hike guidance as it reports second-quarter results after market close Tuesday.
The Lumen stock was up about 45% in premarket trading. Over the last month, the stock has risen a large 144%.
This is another sign that businesses providing the infrastructure to power AI are benefiting even as the market questions the heavy spending on the technology by some of the big tech companies.
Write to Elsa Ohlen at elsa.ohlen@barrons.com

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