Lumen Technologies (LUMN 6.30%) stock is seeing strong bullish momentum in Wednesday's trading. The telecommunications company's share price was up 6.3% as of 3:20 p.m. ET. Meanwhile, the S&P 500 index was up 0.7%, and the Nasdaq Composite index was up 1.3%. The stock had been up as much as 11.3% earlier in the session.
Lumen's valuation is climbing on the heels of a new artificial intelligence (AI) infrastructure investment announced at the White House yesterday. OpenAI, Oracle, and Softbank are teaming up to invest as much as $500 billion in U.S. data centers over the next four years, and Lumen could wind up benefiting.
President Donald Trump hosted OpenAI CEO Sam Altman, Softbank CEO Masayoshi Son, and Oracle chairman Larry Ellison at the White House yesterday to announce Stargate, a new joint venture from the three companies that will invest in AI infrastructure. The trio of partners will kick off the project with a $100 billion investment to build domestic data centers, and spending in the infrastructure space could grow to $500 billion within Trump's term.
Lumen landed major data center partnerships with Microsoft and Meta Platforms in the second half of last year, and it's possible that the Stargate venture will wind up benefiting the telecom.
The recent Stargate announcements suggest the potential of substantial bullish catalysts for Lumen. The telecom's private connectivity fabric (PCF) solutions are already winning big purchases from Microsoft and Meta -- the two biggest spenders on AI infrastructure. With Stargate potentially moving to build its own data centers in the near future, it's not unreasonable to think that the company could wind up wanting the same PCF hardware and services that Microsoft and Meta are using.
While it's too early to determine if the company will emerge as a lasting winner from AI, Lumen is seeing some strong demand in the category. If the company can leverage that demand to improve its earnings and pay down its large debt load, the stock could continue to climb.
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