Analyst: Lumen's (LUMN.US) partnership with Meta (META.US) to expand the network has limited impact

Despite Lumen Technologies (LUMN.US) this morning announcing a partnership with Meta Platforms (META.US) to expand network capacity, Raymond James believes the news will not have a significant impact on Lumen's stock price. The firm's analyst Frank Louthan noted in a report that since the market may have already anticipated the partnership, the stock price is unlikely to see a significant fluctuation in the short term. He rates Lumen "In-Line" and believes the partnership does not bring incremental information beyond what was already known. Louthan speculates that the announcement may be Meta's delayed announcement of its $5 billion pipeline network deal, which it announced in August.

Despite this, Lumen Technologies' stock price rose 5.5% in early trading on Monday. The partnership will provide Meta with enhanced flexibility and secure on-demand bandwidth to support its complex computing needs and help it serve billions of people every day.

Lumen's transformation has met this need, and as Meta uses more AI services on its platform, Lumen is helping Meta provide seamless, easy, and flexible networks to meet its growing needs. Lumen's private connection architecture provides Meta with long-term network capacity for its AI.

Meta's network investment director Alex-Handrah Aimé said that Meta's AI tools are performing increasingly complex tasks, including supporting multilingual conversations and real-time text-to-image translation, while helping people interact with the world in new, immersive ways.

Lumen is expected to report its 2024 third-quarter results on November 5, 2024.