LUMN & MSFT +GLW = Successful AI-Partnership?
This is a retrospective post, harking back to my original post dated 30 Dec 2023.
Click here ! to read my post from the past. What’s so special about a “dated” post?
Well, it was about my purchase of $Lumen Technologies(LUMN)$ stock on a whim, that I do not recommend others do the same.
After 8 months of languid performance, it finally bored fruits. (see below)
On 24 Jun 2024, there was an announcement by both Lumen Technologies and $Microsoft(MSFT)$ about their collaboration to power the future of artificial intelligence (AI) and enable digital transformation.
What this means:
Data centers (using $NVIDIA Corp(NVDA)$ chips) have become a critical infrastructure for Microsoft, responsible for running all the services millions of people and businesses use.
Microsoft’s platform like Azure OpenAI service & Microsoft Co-pilot etc.. are here to help people be more creative, productive and to help solve some of humanity’s biggest challenges.
As Microsoft continues to evolve and scale its ecosystem, they are:
Collaborating with Lumen, as a strategic supplier for its network infrastructure needs.
Co-investing with Lumen to support its next generation of applications for Microsoft platform customers worldwide.
Where Lumen Fits In?
Lumen has:
The network infrastructure and the digital capabilities needed to help support Azure’s mission.
That is to create a reliable and scalable platform that supports the breadth of customer workloads.
These ranges from (a) general purpose & mission-critical, to (b) cloud-native, high-performance computing, and AI, (c) including what’s on the horizon.
After 24 June 2024.
On 24 Jun 2024, LUMN;s end of day stock price was $1.05 per share.
On 01 Aug 2024, LUMN’s end of day stock price was $3.32 per share.
After a span of 39 calendar days, its stock price has gained +316.19%.
What’s Next ?
(1) Target Price - latest.
With LUMN in the spotlight, it is interesting to find out what is its revised target price (latest).
Of all the “revised” target prices, the most “optimistic” came from stockscan (see above).
LUMN stock price forecast for the next 30 days is generally positive.
Its an average analyst price target is $5.4976, representing a +65.59% increase from current price of $3.32.
Highest analyst price target is $8.3835, and lowest is $2.6117.
(2) Any Other News ?
On Thu, 01 Aug 2024, LUMN announced an agreement to reserve 10% of $Corning(GLW)$ global fiber capacity to be used, to interconnect AI-enabled data centers.
The agreement secures the next-generation optical cable (for LUMN) for the next two years.
The 2-years supply will be crucial because of foreseeable AI adoption becoming more pervasive with time.
After all, AI is still in its nascent stage and just starting to be used across industries.
Time To Buy In ?
Trading on the first 2 days of August have been brutal.
US stock market has been hammered big time by skepticism permeating the market that an impending recession is imminent.
All the gains chalked up from June & July 2024, have all but evaporated into thin air over 2 days. That’s brutal !
Looking at LUMN, Microsoft and Corning - triangle co-operation in the AI-race, things are still looking rosy.
Past 5 days.
Against (a) last week’s performance and (b) the backdrop of massive sell off, LUMN’s lost about -25% of its stock price too.
It peaked at $4.01 per share on 01 Aug 2024; still climbing while US market was undergoing corrections.
By the time it wrapped up Fri, 02 Aug 2024 trading it was at $3.07. falling under the spell of a weaker US Non Farm payroll (July 2024) effect.
Taking (a) $5.49 per share as its optimistic target price and (b) US market jitters as a temporary knee jerk reaction - is it time to consider investing a bit of spare cash in LUMN; after DYOD ?
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Goldman Sachs Warns - DON'T Buy The Dip ! ** Worthy read for AUG month **
Do you think collectively LUMN, MSFT & GLW will be able to stage a recovery this week ?
Do you think the upside to LUMN target price is realistic, looking at its last historical high of $11.14 per share, when it peaked on 01 Jul 2022? ?
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