NEW YORK (Reuters) – Shares of Lumen Technologies Inc jumped 30 percent on Wednesday, extending gains from the previous session, after the telecom company raised its annual free cash flow outlook on demand tied to artificial intelligence.
Lumen shares were trading at $6.54 a share after hitting an intraday high of $7.83, the highest since October 2022. The stock nearly doubled Tuesday, surging 93% to close at $5 from $2.59. It is now up 256% this year.
The company announced Monday that it has secured $5 billion in new deals from cloud computing and technology companies, including Microsoft (NASDAQ:MSFT), for networking and cybersecurity equipment as more businesses adopt AI-powered computing.
As a result, Lumen said Tuesday it expects annual free cash flow to jump to between $1 billion and $1.2 billion, from between $100 million and $300 million.
JPMorgan analysts upgraded Lumen’s stock to “neutral” from “underweight.” Other analysts, including TD Cowen, raised their price targets.
Among the 12 analysts covering Lumen, their average price target is $1.75 and their average rating is “hold,” according to LSEG data. Lumen, which has a market cap of about $6.8 billion, has a forward price-to-earnings ratio of minus 40.17, according to LSEG data.