What Happened?
A number of stocks jumped in the afternoon session after renewed investor enthusiasm for the artificial intelligence boom was sparked by a strong forecast from a major cloud provider.
The optimism was ignited by Oracle, which jumped 30% after forecasting a massive increase in AI-powered cloud revenue. This outlook overshadowed the company's recent earnings miss and reinforced investor confidence in the long-term AI trend, benefiting companies that provide critical infrastructure for artificial intelligence. Underscoring the bullish sentiment, investment bank Barclays raised its year-end S&P 500 target, citing resilient economic growth and continued investor excitement for AI as key drivers for the market's strength.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Electronic Components & Manufacturing company Coherent (NYSE: COHR) jumped 5.5%. Is now the time to buy Coherent? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company TTM Technologies (NASDAQ: TTMI) jumped 3.6%. Is now the time to buy TTM Technologies? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Super Micro (NASDAQ: SMCI) jumped 3.2%. Is now the time to buy Super Micro? Access our full analysis report here, it’s free.
- Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) jumped 6.9%. Is now the time to buy Lumen? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company CECO Environmental (NASDAQ: CECO) jumped 3.3%. Is now the time to buy CECO Environmental? Access our full analysis report here, it’s free.
Zooming In On Lumen (LUMN)
Lumen’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 9.2% on the news that the company launched a new high-speed connectivity service, Wavelength RapidRoutes, designed to significantly reduce network provisioning times.
The new service offers ready-to-deploy 100G and 400G wavelength connections with an industry-leading 20-day delivery guarantee, a stark contrast to the months-long waits customers typically face. This move targets data-intensive sectors such as enterprises, hyperscalers, content providers, and government organizations, which require rapid scalability for technologies like AI and cloud computing. "With RapidRoutes, we're eliminating the friction—no more long quoting periods or engineering delays," said Dave Ward, Lumen's chief technology and product officer. By utilizing pre-defined network paths, Lumen aims to streamline the process for high-capacity connections, addressing a critical need for faster data transfer capabilities.
Lumen is up 7.3% since the beginning of the year, but at $6.02 per share, it is still trading 40.5% below its 52-week high of $10.12 from November 2024. Investors who bought $1,000 worth of Lumen’s shares 5 years ago would now be looking at an investment worth $570.77.
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