Why Lumen Technologies Stock Was Rocketing Higher Today

Key Points

• The company is teaming up with a star in the data analytics world.

• The collaboration should lead to significant operational and cost efficiencies if done right.

• 10 stocks we like better than Lumen Technologies ›

A deal with a top name in data analytics brought the bulls into Lumen Technologies (NYSE: LUMN) stock on Thursday. The telecom company saw its share price swell by more than 5% that day, a figure that was far more than high enough to top the S&P 500 index's 0.8% gain.

A top tech partner

Before market open, that data analytics specialist -- Palantir Technologies -- announced that it and Lumen are collaborating on a next-generation initiative. Palantir will bring its foundry and artificial intelligence (AI) platform to Lumen as part of the latter company's broad effort to update, modernize, and streamline its operations.

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Image source: Getty Images.

With significant fiber optic assets, Lumen aims to be a go-to telecom infrastructure partner for enterprises. That hasn't been an easy transition at times, as it's a successor company to a string of legacy businesses focused on traditional, fixed-line telephony.

In its press release, Palantir quoted its partner's chief technology and product officer Dave Ward: "As Lumen powers the backbone of the AI economy, we're determined to make our own operations intelligent and efficient, just like the networks we deliver to our customers."

Ward added that the Palantir partnership will give Lumen the scope "to harness AI to accelerate our modernization efforts and deliver the network and services our customers need in the AI era."

Smart strategy maintained

Palantir generally has a fine reputation as a services provider, so it feels like Lumen has chosen its partner well. Investors are also right to cheer the fact that the telecom is adhering to its current business strategy and might be standing in front of significant cost savings to boot.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.