Lumen Technologies Extends Record Rally on AI Hopes
Lumen Technologies Inc. shares surged as much as 93% in post-market trading Tuesday, extending gains after notching a record one-day jump in the regular session.
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@Lumen Technologies Inc. shares surged as much as 93% in post-market trading Tuesday#ai #startup #shares pic.twitter.com/AP1B06HUDu
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Driving the gains was excitement over artificial intelligence and its ability to translate into results for the company. In earnings released after the bell Tuesday, Lumen raised its forecast for free cash flow for the year, saying it expected between $1 billion and $1.2 billion.
Previously, it had forecast free cash flow between $100 million and $300 million.
- Lumen boosted its free cash flow estimate in Tuesday’s results
- Jump extends a 350% rally from July through Tuesday’s close
Shares of the telecommunications company had already had a big day ahead of the report. The stock closed 93% higher on Tuesday, the biggest jump on record to the highest value since February 2023, after the company said artificial intelligence demand has driven $5 billion of new business and that it is in talks for a further $7 billion in potential sales.
Lumen’s results come as investors are growing increasingly skeptical of the AI trade after earnings from megacap technology companies signaled increased spending with little return on investment. The Nasdaq 100 Index recently fell into correction territory, weighed down by declines in AI darlings like Nvidia Corp., Microsoft Corp. and Amazon.com Inc.
To be sure, Lumen also said it would boost its capital expenditures to tap into what it sees as increasing demand for AI.
