Lumen shares soar 93% after revealing $5 billion in new AI deals
Shares of Lumen Technologies soared as much as 93% on Tuesday after the American telecoms company announced it had secured $5 billion in new contracts from firms looking to install more fiber cables targeting AI.
According to Lumen’s CEO, Kate Johnson, the Louisiana-based company is currently in talks for another $7 billion in potential deals amid rising customer demand. Lumen Technologies provides fiber networks needed for AI data processing. Fiber cables are becoming “increasingly valuable and potentially limited due to booming AI needs,” she said.
Lumen sees massive growth in AI-related 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,” Johnson said in a statement.
“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,” she added.
After the news, shares of Lumen rose 93%, or $2.41 to $5 per share at the market close in NYSE trading on Tuesday. The stock price is up more than 160% since January. Over the past 52 weeks, Lumen’s shares have reached a high of $5.30 and a low of $0.78, according to Google Finance.
Lumen’s latest financial results, which were released on Aug. 6, show that the company narrowed its net loss to $49 million in the second quarter of 2024 from an $8.7 billion net loss a year earlier. The 2023 figure included a non-cash goodwill impairment charge.
As part of the $5 billion deal, Lumen said it will “more than double” its intercity network miles across the United States over the next five years. The firm added that it will also provide access to a large amount of installed dark fiber – laid fiber that is not being used yet.
In July, Lumen reached an agreement with Microsoft to use the Azure cloud computing platform for its digital transformation and artificial intelligence plans. The agreement means that Lumen is now Microsoft‘s number-one provider of network capacity for its data centers.
