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US telecoms firm Lumen sees shares nearly double on AI hype
- The company said AI demand has driven US$5 billion of new business and that it is in talks for a further US$7 billion in potential sales
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Lumen Technologies shares surged as much as 93 per cent in post-market trading Tuesday, extending gains after notching a record one-day jump in the regular session.
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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 US$1 billion and US$1.2 billion. Previously, it had forecast free cash flow between US$100 million and US$300 million. Wall Street analysts covering the company expected the forecast to be about US$217 billion, data compiled by Bloomberg show.
Shares of the telecommunications company had already had a big day ahead of the report. The stock closed 93 per cent higher on Tuesday, the biggest jump on record to the highest value since February 2023, after the company said artificial intelligence demand has driven US$5 billion of new business and that it is in talks for a further US$7 billion in potential sales.
Lumen’s results come as investors are growing increasingly sceptical of the AI trade after earnings from megacap technology companies signalled 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, Microsoft and Amazon.com.
To be sure, Lumen also said it would boost its capital expenditures to tap into what it sees as increasing demand for AI.
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