Lumen Technologies announced an AI-related partnership with Microsoft. Here’s what it means for Lumen
Lumen Technologies (NYSE: LUMN) shares are trading higher after the company and Microsoft (NYSE:MSFT) announced a new strategic partnership.
What happened: The partnership will use the Microsoft Cloud to further drive Lumen’s digital transformation. In addition, Microsoft has chosen Lumen to expand its network capacity and capability to meet the growing demand on its datacenters due to AI.
Lumen’s Private Connectivity Fabric will expand Microsoft’s network capacity and capability to support rising demand on datacenters and Microsoft Azure will further accelerate Lumen’s enterprise-wide digital transformation and drive AI initiatives across the organization and save tens of millions of dollars.
What this means for the stock: By using Microsoft’s cloud and AI technology, Lumen can reduce its overall technology costs. The company expects its cash flow to improve by more than $20 million over the next 12 months while improving its customer experience.
Improved cash flow is beneficial for a stock because it indicates financial health and operational efficiency, allowing the company to cover expenses, invest in growth opportunities, and reduce financial risks. Strong cash flow also enables shareholder value through dividends and buybacks, and enhances investor confidence, potentially leading to higher stock prices.
Price action: Lumen was trading 8.05% higher to $1.61 at the time of writing. The stock has a 52-week high of $2.08 and a 52-week low of $0.78.
