Lumen Technologies shares bounce back 17.7% as inflation news and network-as-a-service product gain traction.

Lumen Technologies' stock rallied 17.7% this week after a disappointing earnings report in July. The company's debt of $13.5 billion makes it sensitive to inflation and interest rate news. However, a tame Consumer Price Index report and Lumen's network-as-a-service offering surpassing 1,000 customers boosted the stock. The new service allows customers to pay for network capacity on a usage basis, making it more appealing. Despite the stock looking cheap with a market cap of $4.52 billion, its huge debt and revenue declines make it risky.

Lumen Technologies (NYSE: LUMN) saw its stock price surge by 17.7% this week, following a disappointing earnings report in July. The company's debt of $13.5 billion has made it sensitive to inflation and interest rate news. However, recent economic indicators and the milestone of surpassing 1,000 customers on its Network-as-a-Service (NaaS) platform have boosted investor confidence.

The Consumer Price Index (CPI) report, released on July 2, 2025, showed annual inflation holding steady at 2.7%, aligning with forecasts and increasing the probability of a Federal Reserve interest rate cut to over 94% [1]. Lower interest rates can stimulate the economy by making it cheaper for businesses to borrow and invest. Further boosting confidence, the National Federation of Independent Business (NFIB) Small Business Optimism Index rose to a five-month high, a crucial indicator for the Business Services sector [2].

Lumen Technologies' NaaS platform allows customers to pay for network capacity on a usage basis, making it more appealing to businesses looking to scale their connectivity needs dynamically. The service offers instant, secure, and scalable connectivity, helping enterprises improve business agility, reduce operational overhead, and support next-gen digital experiences [3].

Despite the stock looking cheap with a market cap of $4.52 billion, its huge debt and revenue declines make it risky. Lumen's NaaS platform is built on top of one of the world's most expansive and deeply interconnected networks, with approximately 163,000 on-net buildings and 340,000 global fiber route miles. The platform includes services like Internet On-Demand for public connectivity, Ethernet On-Demand for layer 2 private connectivity, and IP VPN On-Demand for layer 3 private connectivity [3].

Lumen Technologies is continuing to invest in its network, with plans to expand its on-net footprint to reach 47 million intercity fiber miles by the end of 2028, scaling beyond 100G, and upgrading backbone capacity across key metro and intercity routes. These investments are crucial for delivering the flexible digital infrastructure and connectivity that modern enterprises demand.

References:
[1] https://finance.yahoo.com/news/why-lumen-lumn-stock-today-190100725.html
[2] https://www.nasdaq.com/press-release/lumen-surpasses-1000-customers-network-service-naas-platform-2025-08-13
[3] https://www.stocktitan.net/news/LUMN/lumen-surpasses-1-000-customers-on-network-as-a-service-naa-s-5ozg40f5n3yg.html