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Will Lightpath's AI Strategy Propel Altice's Stock Growth?

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Altice USA Inc. (ATUS - Free Report) recently announced that its subsidiary, Lightpath, is set to introduce two distinct performance units to support rising AI-related demand for network infrastructure. AI adoption is accelerating across industries, and businesses are increasingly looking for better connectivity solutions to support high bandwidth-intensive applications. The business restructuring is expected to enable Lightpath to capitalize on these changing market trends.

The Core Infrastructure and Networking Solutions will concentrate on Lightpath’s core businesses of delivering enterprise-class connectivity and network security solutions. This unit will be the largest contributor to Lightpath’s revenues. The unit will serve Lightpath’s core verticals, which comprise enterprise, government, education, carrier and wireless customers. Its high performance and robust solutions will enable businesses to connect with their respective digital destinations including data centers, cloud providers and AI workloads.

The newly created Major Infrastructure Solutions unit will develop high-capacity infrastructure for customers with substantial bandwidth demands. It aims to address the growing demand for backbone connectivity, intercity and metro networks and support integration with cloud platforms and AI tools. Its product suite includes high-count fiber and conduit solutions to cater to the unique needs of hyperscalers, wholesale clients, large-scale enterprise customers and national technology leaders.

Will ATUS Stock Benefit From This Initiative?

The growing proliferation of AI, cloud computing and other data-intensive applications is driving demand for robust connectivity. The recent business realignment initiative showcases Lightpath’s ability to scale and adapt to changing network requirements. Backed by decades of experience in the market, Lightpath is well equipped to be at the forefront to support surging AI demands and facilitate digital transformation. Altice, who owns a 50.01% stake in Lightpath, is expected to gain from this strategic restructuring initiative. 

Altice’s broadband customers reached 482,000 by the end of the third quarter of 2024, and it expects to grow at an accelerated pace. The company is focused on accelerating its network expansion plans, along with market penetration and fiber network upgrades, for long-term sustainable growth. However, intensifying competition in the fixed wireless broadband market, macroeconomic challenges remain major concerns for the company.

ATUS Stock’s Price Movement

Shares of Altice have gained 7.7% in the past year compared with the industry’s growth of 76.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

ATUS’ Zacks Rank and Key Picks

ATUS currently carries a Zacks Rank #5 (Strong Sell).

Keysight Technologies, Inc. (KEYS - Free Report) carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications, and rising adoption of driver-assistance systems globally.

InterDigital (IDCC - Free Report) carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Zillow Group, Inc. (ZG - Free Report) sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 9.38%. ZG delivered an earnings surprise of 25.47%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in both multi and single-family listings, which is a positive factor.

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