Lumen Technologies (LUMN -3.17%) stock is surging in today's trading. The telecommunications company's share price was up down 2.5% as of 2:30 p.m. ET, after having been up as much as 15.4% earlier in the day's trading.
Lumen stock is making big gains following an announcement that the company has signed a new deal with Meta Platforms (META -0.59%) to provide network infrastructure and services. Through the new partnership, Lumen will be providing fiber internet services to increase Meta's network capacity and support its artificial intelligence (AI) initiatives.
Lumen announces another big AI partner
In addition to providing Meta with access to existing fiber routes, Lumen will also be providing new fiber routes between data centers. The deal with Meta Platforms comes on the heels of contracts that Lumen landed to support Microsoft's AI projects earlier this year, and the pullback for the stock after initially posting big gains likely stems from investors of whether the Meta deal was a new contract win or one that was previously mentioned in less concrete terms.
What's next for Lumen stock?
Lumen stock is now up roughly 259% across this year's trading. Most of the explosive growth for the telecom company's share price has been driven by excitement surrounding the company's opportunity to provide networking services for data center and AI applications.
While no details were given about the value of Lumen's new partnership with Meta were given, the company's previously announced deal with Microsoft suggests that the new deal could be a substantial sales driver for the telecom company/ Following the announcement of its deal with Microsoft, Lumen announced that it had secured $5 billion in new business thanks to demand connected to AI. The telecom also said at the time that it was in discussions to provide additional infrastructures and services potentially worth as much as $7 billion in new deal value.
Landing substantial new deals is undoubtedly a bullish development for Lumen's business, and the new contracts being connected to AI likely does even more to create excitement for the company's stock. On the other hand, investors should keep in mind that there's a lot about the specifics of these new deals that is still unknown -- and the telecom still has a massive debt load to overcome.
