Shares in global communications service provider Lumen Technologies have experienced an impressive rally in recent days. This is what’s behind it.
• Lumen Technologies lands billion-dollar contracts
• Tech company in talks to secure more billion-dollar deals
• Loss in Q2 2024 significantly reduced
According to the company website, Lumen Technologies specializes in helping companies grow by connecting people, data and apps “quickly, securely and effortlessly.” The tech company offers various solutions, such as networks, cloud offerings and cybersecurity, to name just a few. The communications provider can benefit massively from the increasing demand in the field of artificial intelligence.
Lumen recently announced in a press release that it had landed new deals worth five billion US dollars. The fiber optic capacities that Lumen has are particularly in demand, as these are “increasingly valuable and potentially limited” as a resource in the AI age. The billion-dollar collaborations also include some well-known names.
Partnership with Microsoft
At the end of July, Lumen announced that it had entered into a new strategic partnership with software giant Microsoft, which will see Lumen benefit from the Microsoft Cloud to further advance its digital transformation. On the other hand, Microsoft has decided to expand its own network capacities and capabilities using Lumen’s technology to meet the growing, AI-driven demand for its data centers.
Agreement with Corning
At the beginning of August, Lumen announced that it had signed an agreement with Corning that included a “major supply of next-generation fiber optic cables.” This collaboration would “more than double” Lumen’s fiber optic kilometers in the US to provide cloud data centers with better capacity.
“The AI economy is transforming the way business is done, and companies are realizing they need a powerful network infrastructure to handle today’s unprecedented data flows and tomorrow’s demands,” Lumen Technologies CEO Kate Johnson summarizes in the press release.
Further orders in the pipeline
In addition to the already secured order volume of five billion US dollars, the tech company is also in negotiations with customers to win orders worth a further seven billion US dollars.
Balance sheet presented
On Tuesday, Lumen also presented figures for the second quarter of 2024 after the market closed in the US. The communications service provider reported a net loss of $49 million, which was significantly smaller than the previous year’s loss of $8.736 billion. However, the loss in the previous quarter included a non-cash goodwill impairment of $8.793 billion. The diluted loss per share, meanwhile, amounted to $0.05, while EPS of -$8.88 was recorded a year ago.
Meanwhile, sales fell from $3.661 billion in Q2 2023 to $3.268 billion.
Lumen shares explode in price
In response to the tech company’s billion-dollar orders, Lumen Technologies shares ultimately jumped 93.05 percent to $5 in NYSE trading on Tuesday. But the upward trend also seems to be unbroken in Wednesday trading: Lumen shares ultimately gained 33 percent to $6.65.
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