Why Lumen Technology Rallied Today, Even On A Bad Day For The AI Sector
Key Points
Lumen Technologies defied the AI sector today, rallying by double-digits.
Two insiders recently bought stock on the post-earnings, post-election dip.
Lumen is down a lot from its May highs, but its turnaround is still a work in progress.
- Motley Fool Issues Rare "Total Conviction" Buy Alert ›
Shares of Lumen Technologies (NASDAQ:LUMN) rallied on Tuesday, up 10.9% as of 12:33 p.m. EDT.
The broader AI sector was largely down today on the back of today's hotter-than-expected inflation report. However, Lumen defied its peers with a double-digit gain after an SEC filing late yesterday revealed that two executives had recently purchased shares on the open market.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Lumen's CEO and one director buy more stock
Lumen's stock has taken a big hit recently, down over 50% from its May highs. The stock took another leg lower after the company's recent third-quarter earnings release showed mixed results, though the post-election sector-wide sell-off may have been a bigger factor. Investors sold AI stocks hard, both leading up to and after the midterm elections, fearing a slowdown or reversal in the build-out.
Still, some executives think the hate has gone too far. Yesterday, Lumen filed forms with the SEC revealing that on Nov. 6, CEO Kate Johnson bought 100,000 shares at an average price of $3.96 on the open market, and that director Michelle Goldberg bought 25,000 shares at $3.91. Those are significant amounts; even the smaller purchase by Goldberg increased her shares of the company by about one-third.
Image source: Getty Images.
Where Lumen goes from here
Lumen is still a turnaround story burdened by debt; however, it has reduced its debt in recent years by selling assets, while attempting to grow newer network products relevant to the AI revolution. While its legacy businesses are in decline, "strategic" revenue accounted for 55% of total revenue last quarter and grew 10%.
Lumen now trades at a cheap-looking 5 times enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization). Yet whether these insider buys pay off depends on Lumen continuing to grow these new products faster than its legacy network products decline.
Should you buy stock in Lumen Technologies right now?
Before you buy stock in Lumen Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lumen Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $344,878!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,097,846!*
Now, it’s worth noting Stock Advisor’s total average return is 852% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of November 10, 2026.
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
