Lumen leaps by intraday record of 77%, reaches supply agreement with Corning

Lumen Technologies (NYSE:LUMN) stock soared ~77% and is set to extend its 13-day winning streak, rising about 141% in the period.

The shares jumped as Corning (GLW) said it has reached an agreement with Lumen Technologies (LUMN) over allocating 10% of its global fiber capacity for each of the next two years to facilitate Lumen’s build of a new network to interconnect AI-enabled data centers.

“This will be the first outside plant deployment of Corning’s new Gen AI fiber and cable system that will enable Lumen to fit anywhere from two to four times the amount of fiber into their existing conduit,” CEO of GLW Wendell Weeks said.

Shares of the communication and network services provider, have been on the rise since July 11.

The rebound in stock prices came after the firm fell ~42% in the first half of the year, but then leaped 154% from July 1 to July 30.

TD Cowen analyst Gregor Williams attributed the rebound this month to “the improved macro/GDP backdrop for potentially more favorable debt markets” and short coverings “given the outsized short interest.” “The recent AI-driven Microsoft win is likely contributing to the rally, as is recent surge in wireline/wireless ‘convergence’ which puts Lumen’s ILEC business in focus for M&A,” Williams added.

Last week, the firm forged a strategic deal with Microsoft (MSFT) to support digital transformation and drive AI initiatives across its organization.

Looking at Seeking Alpha’s Quant Ratings, the Monroe, Louisiana-based company, has a Hold rating with a score of 2.94 out of 5. The company received a D+ for profitability and a D- for growth prospects. The stock also got an A- for valuation.

Turning to the Wall Street community, about seven out of 11 analysts recommended a Hold rating, with three recommending a Sell and the remaining one recommending a Strong Sell.

“Lumen Technologies has improved its recovery prospects by extending debt maturities and by confirming a positive free cash flow forecast for the current year,” SA analyst The Asian Investor said.

The company’s broadband business, particularly fiber, is experiencing strong momentum and contributing significantly to revenue, The Asian Investor added.

The telecom firm had been going through a tough time with its declining revenue and profitability, huge debt, stiff competition from wireless carriers and an uncertain economic scenario.