Verizon Strikes Fiber Deal With Google Worth Over $1B — CEO Says More Deals Worth Billions In Revenue To Be Announced By Year End

• Schulman said the Google agreement is only the beginning of Verizon's push into AI infrastructure connectivity.
• He described the upcoming deals as long-duration, high-quality revenue streams from some of the world's most demanding infrastructure customers.
• Schulman said Verizon’s low-latency, carrier-grade transport network, originally built for a different era, has become "exactly the right asset" for connecting AI data centers, compute clusters and regions.

Verizon Communications Inc. (VZ) announced on Friday that it has signed a fiber infrastructure agreement with Alphabet Inc.'s (GOOG, GOOGL) Google worth more than $1 billion, as the telecom giant looks to capitalize on surging demand for data center connectivity driven by artificial intelligence.

Speaking during the company's second-quarter (Q2) earnings call, CEO Dan Schulman said Verizon will provide dark fiber to connect Google's data centers.

“The build out of AI infrastructure across the United States is one of the largest capital cycles of our lifetime, and Verizon is uniquely positioned to participate in it,” he said.

Verizon shares were up more than 3% in Friday’s opening trade, while Alphabet’s Class A shares were up about 1%. VZ was among the top trending tickers on Stocktwits at the time of writing.

Schulman Says More Deals Are In The Pipeline

Schulman said the Google agreement is only the beginning of Verizon's push into AI infrastructure connectivity. He said the company expects to announce additional deals by year-end that, collectively, are expected to generate multiple billions of dollars in revenue over the next several years.

Schulman described the upcoming deals as long-duration, high-quality revenue streams from some of the world's most demanding infrastructure customers, adding that Verizon sees a significant runway for growth as demand for AI data center connectivity continues to expand.

Schulman termed the announcement as “consequential,” adding that this foreshadows what the company’s revenue growth profile will look like going forward.

Verizon Sees AI Infrastructure As New Growth Engine

Schulman said Verizon is leveraging its extensive long-haul and metro fiber network to meet growing demand from hyperscalers building AI infrastructure. He said the carrier's low-latency, carrier-grade transport network, originally built for a different era, has become "exactly the right asset" for connecting AI data centers, compute clusters and regions.

He also said Verizon is converting many of its central offices into inference edge data centers and is in discussions with partners interested in using the power-ready sites.

“We expect this initiative to noticeably contribute to our revenue growth starting next year and to grow substantially from there,” Schulman added.

VZ’s Q2 At A Glance

Verizon reported a mixed second quarter (Q2), with earnings per share (EPS) of $1.3 on revenue of $34.3 billion, while Wall Street expected an EPS of $1.27 on revenue of $35.1 billion, according to Fiscal.ai data.

The company also lifted its EPS outlook to $4.99 to $5.04, from $4.95 to $4.99 that it guided for in the first quarter, compared to Wall Street estimates of $4.94.

It also expanded its full-year share repurchase target to up to $4.5 billion after buying back $3.5 billion worth of shares through the first half of the year.

“By compounding lower churn with healthier unit economics, we have generated the strongest operating position we have seen in years,” Schulman said.

What Retail Traders Think Of VZ Stock

Retail sentiment on Stocktwits around Verizon trended in the ‘bullish’ territory at the time of writing.

VZ stock is up 11% year-to-date, while GOOGL stock is up 2%. The S&P 500 ETF (SPY) and the Vanguard Total Stock Market Index Fund ETF (VTI) are up 17% over the past 12 months.

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