Lumen (LUMN 1.60%) stock got hit with a major valuation pullback over the last week of trading. The company's share price fell 24% across the period. Over the same stretch, the S&P 500 managed to climb 0.1%, and the Nasdaq Composite's level declined by 0.5%.
The past week of trading was not kind to artificial intelligence (AI) stocks, and Lumen saw a big pullback amid broader selling trends. Despite a big valuation contraction this week, the company's share price is still up 50.5% this year.
Image source: Getty Images.
Investors took profit on Lumen stock amid AI valuation fears
Lumen stock got hit with a rising wave of bearish momentum as investors repositioned their holdings in response to worries that share prices for AI stocks had become overheated. On the heels of an incredible rally over the last year, some investors opted to exit Lumen stock and lock in some big gains at an uncertain juncture for the market.
NYSE: LUMN
Key Data Points
Macroeconomic and geopolitical risk factors also hit Lumen stock
In addition to AI-category and company-specific valuation concerns, Lumen stock sold off due to macroeconomic and geopolitical risk factors. Investors have become less confident that the Federal Reserve will cut interest rates next month, and concerns that China could move to invade Taiwan sometime this decade were thrust back into the spotlight.
Lumen has been scoring some big wins with its private-connectivity-fabric (PCF) technologies -- with major customers and partners including Microsoft and Meta Platforms. The company looks poised to see substantial sales growth in 2026, but its valuation could continue to be highly volatile in the near term as investors waver on how to value AI stocks.
