Lumen Technologies (LUMN, Financial) saw its stock surge over 10% following the announcement of a strategic deal with Meta Platforms (META, Financial) to expand AI capabilities. The move aims to supercharge Meta's network infrastructure, laying the groundwork for scaling its AI-powered services to meet surging demand. By adding new data center routes and tapping into Lumen's advanced network solutions, the companies are setting the stage for Meta's bold ambitions in AI.
But while investors jumped on the news, Raymond James analyst Frank Louthan wasn't convinced, arguing the announcement "should not move Lumen's stock" since the potential benefits might already be priced in. Louthan, who holds a Market Perform rating on the stock, suggested the deal could simply be a delayed update tied to Meta's involvement in the $5 billion conduit network announced back in August. For now, he sees no clear signs that the partnership offers any fresh upside beyond what was already anticipated.
Despite the mixed reception, Lumen's EVP Ashley Haynes-Gaspar called the partnership "one of the biggest expansions of network capacity in our lifetime." As AI development pushes forward, Meta is venturing deeper into real-time translation and immersive experiences, and this collaboration sets both companies up to lead in the AI-driven future. Whether the market's optimism holds, however, may depend on how quickly Meta can translate this network boost into real gains.
