Lumen Shares Surge Following Positive Broadcom Earnings Report

Lumen (NYSE: LUMN) saw its stock rise 7.8% during Friday’s trading as of 3 p.m. ET, outperforming the broader market with the S&P 500 index gaining 0.4% and the Nasdaq Composite index up by 0.5%.

A favorable trend in the overall market has been accentuated by Broadcom’s recent earnings report. As a leader in connectivity and networking chips, Broadcom’s performance serves as an important indicator for the artificial intelligence (AI) sector, having delivered results that exceeded analyst expectations.

Lumen’s Stock Climbs on Broadcom’s Strong Q1 Performance

The rally in Lumen and other AI hardware stocks can be attributed to Broadcom’s robust first-quarter results for its fiscal year ending February 2. The company reported non-GAAP (adjusted) earnings per share of $1.60 on sales of $14.92 billion, surpassing the average analyst forecast of $1.51 per share on revenue of $14.59 billion.

Furthermore, Broadcom’s forward guidance indicates a sustained growth trajectory in the AI infrastructure market. The firm anticipates overall revenue of approximately $14.9 billion, representing year-over-year growth of about 20%. Such projections bode well for Lumen’s prospects.

Future Outlook for Lumen

Broadcom estimates revenues of $4.4 billion from AI semiconductors in Q4, as major customers continue to invest in processors and connectivity for data centers. This places Lumen in a favorable position to capture new business opportunities.

The relationship between Lumen and various cloud hyperscale clients like Microsoft and Meta Platforms has been pivotal. With Broadcom’s positive outlook for investment in AI data centers by hyperscalers, Lumen may secure new fiber network contracts and additional support services engagements.

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Randi Zuckerberg, a board member of The Motley Fool, has no positions in the stocks mentioned. The Motley Fool recommends Broadcom and has positions in and recommends Meta Platforms and Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.