By Chibuike Oguh

NEW YORK (Reuters) – Shares of Lumen Technologies surged 30% on Wednesday, extending gains from the previous session, after the telecommunications company boosted its annual free-cash-flow forecast due to demand related to artificial intelligence.

Lumen shares were trading at $6.54 per share after hitting an intra-day high of $7.83, which is the highest since October 2022. The stock nearly doubled on Tuesday, soaring 93% to close at $5 from $2.59. It is now up 256% this year.

The company announced on Monday it had secured new deals worth $5 billion from cloud and technology companies, including Microsoft, for its networking and cybersecurity equipment as more businesses adopt AI-driven computing.

As a result, Lumen reported on Tuesday that it expects annual free cash flow to jump to between $1 billion and $1.2 billion, from between $100 million and $300 million.

JPMorgan analysts upgraded Lumen to “neutral” from “underweight.” Other analysts, including from TD Cowen, raised their price targets.

Among the 12 analysts who cover Lumen, their median price target is $1.75 and their average rating is “hold”, according to LSEG data. Lumen, which has a market value of about $6.8 billion, has a forward price-earnings ratio of minus-40.17, per LSEG data.