Lumen Technologies' stock has gained 416% in three years as it signs nearly $13 billion in contracts with AI hyperscalers for its fiber-optic infrastructure.

Lumen announced a $475 million acquisition of Alkira, a software company specializing in cloud-to-cloud connectivity, in May. The deal targets 'East-West' traffic (data moving between data centers and cloud environments) and is expected to reduce Lumen's capital expenses by $100 million to $200 million over time.

Lumen operates nearly 80 million miles of fiber-optic cable connecting 139 data centers across North America, with connections running at 400 gigabits per second. Recent clients include Microsoft, Anthropic, AWS, and Google Cloud, with AWS naming Lumen the first network operator for its new Interconnect service.

The company remains unprofitable with $17 billion in debt, and legacy revenue fell 3.2% year over year in Q1. The stock trades at 0.9 times sales despite recent gains.