Today, a little-known company is making waves on Wall Street. Lumen Technologies (NYSE:LUMN) is a penny stock but it likely won’t be for long. The telecommunications company is surging today on news that it has secured $5 billion in new business deals, primarily due to demand for its artificial intelligence (AI) applications. One deal is with tech sector leader Microsoft (NASDAQ:MSFT), who has confirmed plans to “use Lumen’s network equipment to expand its capacity for AI workloads.” This shows that AI demand is still strong and that LUMN stock may be among the market’s AI breakout sensations during the second half of 2024.
What’s Happening With LUMN Stock
Since markets opened today, LUMN stock has been skyrocketing. As of this writing, it is up over 80% in just a few hours, and it is poised to pass the $5 mark, pulling itself out of penny stock territory. For a stock that traded at just over $1 per share a month ago, this type of growth is hard to overlook. New partner Microsoft is also rising today on the news after yesterday’s selloff sent many tech stocks plunging.
That agreement isn’t the only new deal that is helping boost LUMN stock, though. Lumen also recently announced an agreement with technology company Corning Incorporated (NYSE:GLW) for the next-generation optical cable that it needs to continue offering more capacity to cloud data centers. Both deals show that Lumen is well-positioned to continue capitalizing on the growing AI demand:
“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,” said Kate Johnson, president and CEO, Lumen Technologies. “Our partners are turning to us because of our AI-ready infrastructure and expansive network. This is just the beginning of a significant opportunity for Lumen, one that will lead to one of the largest expansions of the internet ever.”
Why It Matters
The recent tech selloff has likely caused some investors to wonder if the recent AI boom is over. But Lumen’s recent success should make it clear that it isn’t. Lumen notes that many large companies across different sectors are “seeking to secure fiber capacity quickly” as red-hot AI needs continue to drive demand. So much so, in fact, that the company is currently in discussions that could lead to an additional $7 billion in sales opportunities.
LUMN stock is one of today’s top winners, but if the company can reach anywhere near that type of growth, it could finish out 2024 among the top AI breakouts. Now that investors have seen what Lumen can do, they will likely be watching it closely as AI demand continues to boom.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
