Lumen (LUMN -0.58%) stock is soaring in Friday's trading. The company's share price was up 7.8% as of 3 p.m. ET amid a 0.4% increase for the S&P 500 index and a 0.5% gain for the Nasdaq Composite index.
NYSE: LUMN
Key Data Points
In addition to positive momentum for the broader market, Lumen is getting a big boost from Broadcom's recent earnings report. Broadcom is a designer of connectivity and networking chips and has become a key bellwether for the artificial intelligence (AI) space -- and it just posted better-than-expected quarterly results.
Lumen stock is jumping thanks to Broadcom's strong Q1 report
Lumen and other AI hardware stocks are moving higher today thanks to Broadcom's results for the first quarter of its current fiscal year, which ended Feb. 2. The chip specialist posted non-GAAP (adjusted) earnings per share of $1.60 on sales of $14.92 billion, beating the average analyst estimate's call for adjusted earnings per share of $1.51 on sales of $14.59 billion.
Even better, management's forward guidance and commentary suggests that growth in the AI infrastructure market will remain very strong in the near term. Broadcom said that it expects overall revenue to come in at roughly $14.9 billion -- good for year-over-year growth of roughly 20%. That's good news for Lumen.
What's next for Lumen?
Broadcom said that it anticipates generating $4.4 billion in revenue from AI semiconductors alone in Q4 as hyperscale customers continue to invest in processors and connectivity solutions for data centers. This forecast points to a favorable demand outlook for Lumen.
The story surrounding Lumen stock has become closely tied to the company's relationship with cloud hyperscale customers, including Microsoft and Meta Platforms. With Broadcom signaling that hyperscalers are continuing to invest heavily to build out AI data centers, Lumen could win new fiber network and support services deals.
