Raymond James said Lumen Technologies' (LUMN, Financials) new alliance with Meta Platforms (META, Financials) to increase Meta's network capacity for artificial intelligence research is unlikely to have a short-term impact on Lumen's shares. “We do not believe this announcement warrants short-term price action as it is likely already reflected in the outlook,” said analyst Frank Louthan.

Louthan maintained Lumen's “Market Perform” rating and said: “It is currently unclear whether there is an increase compared to what was previously known.” He emphasized that this action appears to be part of the already announced 5 billion-dollar Conduit Network transaction in August aimed at improving Meta's infrastructure.

The collaboration between Lumen and Meta significantly increases Meta's network capacity to enable its AI-driven products. By using dedicated connections enabled by Lumen's Private Connectivity Fabric, Meta can improve the size and reliability of its AI system. The improved network capacity meets Meta's increasing need for fast, secure on-demand bandwidth to power demanding AI activities such as real-time text-to-image translation, language processing and immersive AI experiences on its platforms.

The partnership leverages Lumen's infrastructure to ensure consistent network performance as Meta expands its operations globally, and underscores Meta's ambition to leverage artificial intelligence to power its next-generation services.

This article first appeared on GuruFocus.