What a news cycle. All I hear is people shitting on a company of what Lumen is but then I go to my AI and ask why is LUMN poppin and lockin.

She tells me in her Scarlett Johansson voice that this was the Lumen Guide as of today.

Based on the information provided in the press release, Lumen Technologies updated its full-year 2024 financial outlook. Here are the key components of their guidance:

1. Adjusted EBITDA:
   • Current Outlook: $3.9 to $4.0 billion
   • Previous Outlook: $4.1 to $4.3 billion
2. Free Cash Flow:
   • Current Outlook: $1.0 to $1.2 billion
   • Previous Outlook: $100 to $300 million
3. Net Cash Interest:
   • Current Outlook: $1.15 to $1.25 billion
   • Previous Outlook: $1.25 to $1.35 billion
4. Capital Expenditures:
   • Current Outlook: $3.1 to $3.3 billion
   • Previous Outlook: $2.7 to $2.9 billion
5. Cash Income Taxes/(Refund):
   • Current Outlook: ($200) to ($300) million (unchanged)
   • Previous Outlook: ($200) to ($300) million

I say that's odd I don't see the $5 Billion of new revenue from Microsoft in here. So I do a little google search and I find this gem on Lumen's website.

DENVER, Aug. 5, 2024 /PRNewswire/ -- Lumen Technologies (NYSE: LUMN) today announced it has secured $5 billion in new business driven by major demand for connectivity fueled by AI. Large companies across industry sectors are seeking to secure fiber capacity quickly, as this resource becomes increasingly valuable and potentially limited, due to booming AI needs. In addition, Lumen is in active discussions with customers to secure another $7 billion in sales opportunities to meet the increased customer demand.

I then go back to ask Scarlette so you mean to tell me that a company that was making about $14-15 Billion in revenue is about to add an additional $12 Billion. And that isn't even in the guide that they posted today!

She said, YEP

Thank you for providing this additional press release. This information provides crucial context to the situation and helps explain the market's dramatic reaction. Let's break down the key points:

1. Timing: This press release was issued on August 5, 2024, one day before the earnings release we discussed earlier.
2. Secured Business: Lumen has secured $5 billion in new business, specifically driven by AI-related connectivity demands.
3. Additional Opportunities: The company is in active discussions for another $7 billion in potential sales opportunities.
4. Market Dynamics: There's a sense of urgency in the market, with large companies across various industries seeking to quickly secure fiber capacity due to AI needs.
5. Resource Scarcity: The press release suggests that fiber capacity is becoming increasingly valuable and potentially limited, creating a favorable supply-demand dynamic for Lumen.

This information helps explain several things:

1. Stock Movement: The dramatic stock price increase makes more sense in light of this transformative level of new business and potential future contracts.
2. Guidance Update: The significant increase in free cash flow guidance aligns with this influx of new business, though it may still be conservative given the total potential value of new and prospective contracts.
3. AI as a Growth Driver: This press release clearly positions Lumen as a key beneficiary of the AI boom, specifically in providing the necessary infrastructure.
4. Timing of Information: By releasing this information a day before the earnings report, Lumen effectively set the stage for interpreting their financial results and outlook.

The market's extremely positive reaction suggests that investors see this as a potential turning point for Lumen, transforming its growth prospects and competitive position in the rapidly evolving AI infrastructure market. The scale of the new and potential business ($12 billion total) is particularly significant given Lumen's previous annual revenue was around $14-15 billion.

Cool, I am going to buy some shares