15 Best Penny Stocks to Buy According to Billionaires

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

Price: $4.87

Number of Hedge Fund Holders: 44 

Number of Billionaire Investors: 10

Total Value of Billionaire Holdings: $223,189,499

Lumen Technologies, Inc. (NYSE:LUMN) operates as a facilities-based technology and communications company focused on delivering integrated network, cloud, security, and collaboration solutions. The company maintains a global fiber network and operates one of the world’s most connected internet networks, supporting hybrid networking and edge computing needs.

On February 12, Wells Fargo analyst Eric Luebchow upgraded the stock to Equal Weight from Underweight, with a price target of $5. The analyst noted that the potential sale of Lumen’s Quantum Fiber unit could generate free cash flow accretion and reduce debt, creating a near-term upside catalyst. As a result of this free cash flow generation capability, Luebchow found it challenging to maintain an Underweight rating on the stock.

Moreover, Lumen Technologies, Inc. (NYSE:LUMN) bounced back in the fiscal fourth quarter of 2024. It reported a net income of $85 million, which is a stark improvement from a $1.995 billion net loss in Q4 2023. In addition, the company has secured $8.5 billion in PCF deals in 2024, including partnerships with Microsoft, Amazon, Google Cloud, and Meta to support AI-driven data demands. The stock was held by 10 billionaire investors in Q4 2024, making it one of the best penny stocks to buy according to billionaires.

ClearBridge Small Cap Strategy stated the following regarding Lumen Technologies, Inc. (NYSE:LUMN) in its Q3 2024 investor letter:

“Stock selection in the communication services sector was a significant detractor during the period, largely due to not owning Lumen Technologies, Inc. (NYSE:LUMN), which provides products and services including dark fiber, edge cloud services and internet protocol, among others. The company, which began the quarter with a $1.1 billion market cap, skyrocketed after it signed agreements with Microsoft and Corning to use its network and technologies to support their AI data center buildouts, resulting in a nearly 350% return and ending the quarter with a $7.2 billion market cap. However, despite this meteoric rise, we believe that the company remains a highly risky asset with a significantly leveraged balance sheet, and one not suitable for our focus on high-quality, long-term compounders.”