Jinwu Financial News | CITIC Securities said that in the latest financial report in June, Lumen Technologies (LUMN US) sharply raised its free cash flow forecast for the 2024 fiscal year and indicated that it has now received 5 billion US dollars in orders, mainly due to tech giants' demand for AI data center connectivity. The bank believes this is mainly because as the computing power cluster continues to expand, it is already difficult for a single data center to satisfy. Currently, the AI capital expenditure of mainland cloud vendors is also growing rapidly. The growing cluster size and data volume will also bring demand for long-distance optical fiber transmission such as DCI.
The bank suggests focusing on two main lines of investment: optical module manufacturers that are expected to meet overseas and domestic DCI demand in the future; and operators/fiber optic cable manufacturers/equipment vendors with leading layout in long-distance transmission scenarios such as DCI and 400G backbone networks. Such as China Mobile, ZTE, etc.
