Why Lumen Technologies Stock Is Skyrocketing Today
The stock of Lumen Technologies (NYSE: LUMN) is posting explosive gains in Tuesday’s trading. The company’s share price was up 87.3% as of 3:15 p.m. ET today, according to data from S&P Global Market Intelligence.
In a press release yesterday, Lumen showed that it’s benefiting from demand for fiber networks to support artificial intelligence (AI) services. Following the news, the stock received a ratings upgrade and price-target increase from Citigroup.
Lumen is scoring wins thanks to AI
The company announced yesterday that it had secured $5 billion in new business thanks to AI-related demand. It also said that it was in talks with existing customers about additional deals that could lead to another $7 billion in sales.
The company recently forged a deal to provide fiber infrastructure to support Microsoft‘s data centers, and it looks like AI and related cloud services are emerging as a substantial performance catalyst. Lumen says that it plans to more than double the size of its intercity network over the next five years, and management expects that its ability to provide AI-ready infrastructure to partners is just beginning to open up long-term opportunities.
An analyst upgrade, but there’s a catch
On the heels of the announcement and forecast, Citi analyst Michael Rollins upgraded his rating on Lumen stock from sell to neutral. He believes that major new fiber deals will give the company the flexibility to reduce its debt load, improve earnings, and create spinoff opportunities.
Rollins also increased his one-year price target from $1.25 per share to $3.15. But with the pricing surge that the stock has already seen today, the analyst’s new target actually suggests potential downside of roughly 35%.
Should you invest $1,000 in Lumen Technologies right now?
Before you buy stock in Lumen Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lumen Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $615,516!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of August 6, 2024
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Why Lumen Technologies Stock Is Skyrocketing Today was originally published by The Motley Fool
