5 Best AI Stocks Under $50

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In this article, we discuss the 5 best AI stocks under $50. If you want to read our detailed analysis of the Artificial Intelligence industry, go directly to the 10 Best AI Stocks Under $50.

Best AI Stocks Under $50

5. Lumen Technologies, Inc. (NYSE: LUMN)

Number of Hedge Fund Holders: 29
Share Price as of May 12, 2021: $13.95 per share
Total Value of Hedge Fund Holdings: $772,132,000

Ranking 5th in our list of the 10 best AI stocks under $50 is Lumen Technologies, Inc. (NYSE:LUMN). In December 2020, the Louisiana-based communication and network company entered into a partnership with Itential, the industry pioneer in intelligent multi-domain network automation. The partnership allowed the automation platform to be part of Lumen network’s consulting services, enabling users to be more productive and efficient.

Lumen Technologies, Inc. (NYSE:LUMN) has a market cap of $15.4 billion and operating revenue in the full year 2020 of $20.71 billion. In January, Morgan Stanley analyst Simon Flannery downgraded LUMN (NYSE: LUMN) from Equal-weight to Underweight with a price target of $12.10.

There were 29 hedge funds reported owning stakes in Lumen Technologies, Inc. (NYSE:LUMN) at the end of the fourth quarter, down from 31 funds a quarter earlier. The total value of these stakes at the end of Q4 is $772 million. 

Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, mentioned that good changes in the company’s market composition benefited LUMN in its Q1 2021 investor letter:

“Lumen (40%, 3.33%), the global fiber company, was the top contributor. While COVID fallout still weighed on fourth quarter results, the company benefitted from positive business mix improvements. Early in the quarter, Lumen appreciated 38% in a few short days amidst the “Game Stop / Reddit” short cover phenomenon. After this shortterm bounce, Lumen’s stock price appreciated more steadily over the last six weeks of the quarter with improved results. Many of last year’s worst-case fears have not materialized and the outlook is improving for the core business. We continue to believe that the company has multiple ways within its control to both grow and realize value per share, and we have a 13D filed to allow us to discuss these options with the company. Lumen’s board, which includes Southeastern-nominated Chairman Mike Glenn from FedEx and Director Hal Jones from Graham Holdings, is doing good work to realize Lumen’s hidden value and return the business to FCF/share growth. Despite its appreciation, the stock trades at less than half of our appraisal.”

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