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Can AI Infrastructure Drive Verizon's Next Long-Term Growth?
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Key Takeaways
Verizon's $1B Google deal uses dark fiber to connect data centers for growing AI workloads.
AI connectivity could become a long-term growth avenue as Verizon targets hyperscalers and edge AI.
Verizon is converting some central offices into edge data centers to bring AI inference closer to users.
Verizon Communications Inc. (VZ - Free Report) is positioning its fiber network and existing infrastructure for the growing demand for AI connectivity. The company recently signed a more than $1 billion agreement with Google. Per the deal, Google will use Verizon’s dark-fiber routes to connect data centers.
The rapid expansion of AI workloads is increasing the need for high-capacity, low-latency connections between data centers. Verizon, with its extensive long-haul and metro fiber network, is well suited to match these requirements. The company is also continuing to deploy fiber at scale. This supports Verizon’s consumer broadband strategy and boosts prospects in the AI infrastructure projects.
Verizon also expects to announce additional agreements with hyperscalers by year-end. This could collectively represent multiple billions of dollars in revenue over the next several years.
It is to be noted that Verizon is also looking beyond connectivity between large data centers. The company is converting some of its existing central offices into edge data centers to support AI inference closer to end users. In addition to the AI data center market, the edge AI domain is also projected to grow substantially in the upcoming years. AI infrastructure could become an important long-term growth avenue for Verizon. The Google agreement provides an early validation of this opportunity.
How Are Competitors Faring?
Verizon faces stiff competition from AT&T, Inc. (T - Free Report) and Lumen Technologies (LUMN - Free Report) in the connectivity space. AT&T expects AI-ready connectivity needs to grow as enterprises and consumers require lower latency, stronger uplink capacity and more reliable traffic management. In second-quarter 2026, management highlighted that dense fiber, 5G backhaul and spectrum depth are central to supporting future AI workloads, which are expected to increase network traffic over time. The planned EchoStar 600 MHz spectrum acquisition is intended to strengthen low-band uplink capacity. Management also pointed to nationwide MEC partnerships and dense fiber backhaul as enablers for latency-sensitive edge workloads, with private 5G and edge pilots underpinning enterprise interest in AI use cases.
Lumen’s NaaS business is gaining traction as enterprises shift to on-demand connectivity to support AI and multi-cloud workloads. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Lumen has inked deals with various tech giants like Microsoft, Amazon, Google Cloud and Meta Platforms to provide the network capabilities for AI innovation.
VZ’s Price Performance, Valuation & Estimates
Verizon has gained 9.6% over the past year against the industry’s growth of 86%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company’s shares currently trade at 9.05, lower than the 39.31 for the industry.
Image Source: Zacks Investment Research
VZ’s earnings estimate for 2026 has increased 1.21% to $5.03 per share, while the same for 2027 has increased 0.38% to $5.29 over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Can AI Infrastructure Drive Verizon's Next Long-Term Growth?
Key Takeaways
Verizon Communications Inc. (VZ - Free Report) is positioning its fiber network and existing infrastructure for the growing demand for AI connectivity. The company recently signed a more than $1 billion agreement with Google. Per the deal, Google will use Verizon’s dark-fiber routes to connect data centers.
The rapid expansion of AI workloads is increasing the need for high-capacity, low-latency connections between data centers. Verizon, with its extensive long-haul and metro fiber network, is well suited to match these requirements. The company is also continuing to deploy fiber at scale. This supports Verizon’s consumer broadband strategy and boosts prospects in the AI infrastructure projects.
Verizon also expects to announce additional agreements with hyperscalers by year-end. This could collectively represent multiple billions of dollars in revenue over the next several years.
It is to be noted that Verizon is also looking beyond connectivity between large data centers. The company is converting some of its existing central offices into edge data centers to support AI inference closer to end users. In addition to the AI data center market, the edge AI domain is also projected to grow substantially in the upcoming years. AI infrastructure could become an important long-term growth avenue for Verizon. The Google agreement provides an early validation of this opportunity.
How Are Competitors Faring?
Verizon faces stiff competition from AT&T, Inc. (T - Free Report) and Lumen Technologies (LUMN - Free Report) in the connectivity space. AT&T expects AI-ready connectivity needs to grow as enterprises and consumers require lower latency, stronger uplink capacity and more reliable traffic management. In second-quarter 2026, management highlighted that dense fiber, 5G backhaul and spectrum depth are central to supporting future AI workloads, which are expected to increase network traffic over time. The planned EchoStar 600 MHz spectrum acquisition is intended to strengthen low-band uplink capacity. Management also pointed to nationwide MEC partnerships and dense fiber backhaul as enablers for latency-sensitive edge workloads, with private 5G and edge pilots underpinning enterprise interest in AI use cases.
Lumen’s NaaS business is gaining traction as enterprises shift to on-demand connectivity to support AI and multi-cloud workloads. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Lumen has inked deals with various tech giants like Microsoft, Amazon, Google Cloud and Meta Platforms to provide the network capabilities for AI innovation.
VZ’s Price Performance, Valuation & Estimates
Verizon has gained 9.6% over the past year against the industry’s growth of 86%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company’s shares currently trade at 9.05, lower than the 39.31 for the industry.
Image Source: Zacks Investment Research
VZ’s earnings estimate for 2026 has increased 1.21% to $5.03 per share, while the same for 2027 has increased 0.38% to $5.29 over the past 60 days.
Image Source: Zacks Investment Research
Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.