In an impressive rally, Lumen Technologies, a telecommunications company, saw its shares surge by a remarkable 30% on Wednesday, building on the momentum from the previous session. This surge came after the company raised its annual free-cash-flow forecast, attributing the increase to the growing demand for artificial intelligence technology.

Trading at $6.54 per share, Lumen's stocks reached an intra-day high of $7.83, the highest level since October 2022. The surge accelerated further on Tuesday, with the shares skyrocketing by 93% and closing at $5, up from $2.59. Year-to-date, Lumen's stock has witnessed a remarkable surge of 256%.

On Monday, Lumen Technologies made an exciting announcement, revealing that it had secured new deals worth $5 billion with prominent cloud and technology companies, including Microsoft. These deals primarily relate to networking and cybersecurity equipment as more businesses embrace AI-driven computing.

As a result, Lumen Technologies released an update on Tuesday, foreseeing a significant jump in annual free cash flow. The company now expects the figure to range between $1 billion and $1.2 billion, a substantial increase from the previous estimate of $100 million to $300 million.

Impressed by these promising developments, JPMorgan analysts have upgraded Lumen Technologies' rating from "underweight" to a more optimistic "neutral." Additionally, analysts from TD Cowen have raised their price targets for the company. Among the 12 analysts covering Lumen, the median price target is $1.75, with an average rating of "hold," according to LSEG data.

With a market value of approximately $6.8 billion, Lumen Technologies currently boasts a forward price-earnings ratio of minus-40.17, according to LSEG data.

The surge in Lumen Technologies' shares points to growing investor confidence in the company's ability to capitalize on the increasing demand for AI-related solutions. As businesses across various sectors embrace AI-driven computing, Lumen Technologies is well-positioned to provide the necessary networking and cybersecurity equipment, attracting lucrative deals with prominent tech giants like Microsoft.

Disclaimer: This article is based on information from Reuters and is intended for informational purposes only.