As recently as two years ago, Lumen Technologies (NYSE: LUMN) was in the stock market junkyard, trading at around $1 per share. However, thanks to an unexpected tailwind, shares in the telecommunications industry stock have experienced an incredible price rebound.

In just 24 months, this artificial intelligence (AI) stock is up 660%. Yet while you may lament not getting in earlier on this long-shot comeback story, the good news is that the bull case for Lumen is still unfolding.

Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »

How Lumen hit bottom

In the early 2020s, Lumen Technologies, the product of several regional phone company mergers, was popular among value investors as a de-leveraging and turnaround story. Investors expected a big recovery as Lumen sold off legacy assets to pay down debt and monetize its fiber-optic network. At the time, Lumen’s focus was on monetizing its fiber asset by growing its residential fiber broadband business.

Unfortunately, this pivot failed to pay off fast enough. It didn’t help that Lumen continued to allocate billions to dividends and buybacks. Eventually, the company eliminated its dividend, but it was too little, too late. With revenue and cash flow declining, and its appeal as a turnaround, value, and high-yield dividend stock vanishing, shares plummeted to all-time lows.

Don’t sleep on a continued recovery

Starting in 2024, the company began pivoting toward providing services to artificial intelligence (AI) data . So far, the company has entered nearly $13 billion in what it calls “private connectivity fabric” contracts with AI and tech companies, including Microsoft and Anthropic.

Lumen has also sold its residential fiber business to AT&T, reducing debt by nearly $5 billion. While analysts do not expect Lumen to report positive earnings this year or the next, Lumen continues to enter into new AI data center connectivity deals, such as a recently announced collaboration with Amazon‘s AWS unit. Other efforts, such as debt reduction and asset sales, could also move the needle. Lumen is quietly recovering, but don’t sleep on the opportunity.

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.