Shares of Lumen Technologies (LUMN -0.25%) are up Friday. The stock gained 3.8% as of 1:50 p.m. ET but was up as much as 5.7% earlier in the day. The leg up comes as the S&P 500 and Nasdaq Composite lost 0.3% and 0.5%, respectively.
Shares of Lumen were elevated by the recent announcement of President Trump's Project Stargate.
Trump's new initiative boosts AI stocks
President Trump, alongside key leaders from around Silicon Valley, announced from the White House this week that AI infrastructure was getting a major influx of cash. Dubbed Project Stargate, the initiative will involve $500 billion in private investment -- much of which will be provided by SoftBank -- focused on building out American artificial intelligence (AI) infrastructure.
Lumen's technology helps facilitate rapid communication in AI data centers. Having inked key deals with Meta and Microsoft this year, the latter of which may be one of the first to see Project Stargate dollars given its privileged relationship with OpenAI, the company is in a position to benefit.
Beyond this, a general sense of optimism permeates the AI sector this week after President Trump rolled back Biden-era regulations.
What's next for Lumen
Despite the wave of enthusiasm, Lumen's future remains unclear. The company has repeatedly missed earnings targets all while failing to consistently turn a profit or grow revenues. In fact, the company's top line has shrunk from $21.5 billion in 2019 to $14.6 billion last year. I would avoid Lumen for now.
