Verizon Communications Inc. (NYSE: VZ) raised its full-year earnings and wireless subscriber forecasts on October 26 after stronger-than-expected customer growth, while announcing an artificial intelligence infrastructure agreement worth more than $2 billion with Amazon.com Inc. (NASDAQ: AMZN) through Amazon Web Services (AWS).
The updated outlook and new contract come as Verizon seeks to improve its core wireless business and develop additional revenue from enterprise connectivity. The company’s third-quarter earnings announcement showed stronger subscriber additions and higher profit, although revenue fell short of analysts’ expectations.
Verizon reported 406,000 net additions of postpaid phone subscribers during the third quarter, nearly double the 209,439 expected by analysts surveyed by Visible Alpha, according to Reuters. The company also added 137,000 postpaid accounts and 314,000 broadband connections.
Verizon shares rose 2.4% in premarket trading following the announcements, Reuters reported.
Verizon Raises Earnings and Subscriber Forecasts
Verizon now expects to add between 1.1 million and 1.2 million postpaid phone subscribers in 2026, up from its previous forecast of 750,000 to 1 million. The company also increased its full-year adjusted earnings-per-share outlook to $5.04-$5.06, compared with the previous range of $4.99-$5.04.
Third-quarter net income increased to $5.3 billion, or $1.25 per share, while adjusted earnings reached $1.31 per share, according to The Wall Street Journal. Revenue rose 1.5% year over year to $34.3 billion but missed analyst expectations of approximately $34.7 billion.
Lower device-upgrade volumes weighed on revenue as customers held on to their phones for longer after Verizon reduced device subsidies, Reuters reported. The company has also been reshaping its wireless business under Chief Executive Dan Schulman, including simplifying its service plans and changing how it attracts customers.
Verizon introduced its Simplicity plan in June, offering transparent pricing and unlimited data. The stronger subscriber figures suggest the strategy is gaining traction, although the revenue shortfall shows that customer growth has not yet translated into a stronger-than-expected quarterly top line.
The results also arrive amid heightened competition in the US wireless market. Investors are assessing how established carriers can defend customer relationships and revenue as new connectivity options emerge. Wealthier Today previously examined the issue in its report on SpaceX’s wireless spectrum deal and the implications for Verizon, AT&T and T-Mobile.
Verizon and AWS Expand AI Data Center Infrastructure Partnership
Under the agreement worth more than $2 billion, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers. The network links are intended to support faster and more reliable data transfers as demand for AI computing increases, according to Reuters and the WSJ report.
The deal builds on Verizon’s existing work with major cloud providers. In July, the telecom company announced an agreement worth more than $1 billion with Google to connect data centers using dark fiber, a type of fiber-optic cable dedicated to a customer’s use.
These contracts offer Verizon a way to expand beyond traditional wireless and broadband services as AI developers and cloud companies invest in additional computing capacity. They also reflect the growing importance of fiber networks in moving data between facilities that support AI workloads.
Amazon has been expanding its own AI infrastructure to meet customer demand. Wealthier Today’s coverage of Amazon’s reported talks to acquire AI startup Decart examined another part of the company’s efforts to strengthen its AI technology and cloud business.
For Verizon, the immediate focus remains on turning subscriber growth into sustained financial improvement while building new enterprise revenue streams. The company’s higher earnings and subscriber forecasts provide a stronger near-term outlook, but the quarterly revenue miss shows that challenges remain.
The Amazon agreement adds a significant infrastructure contract to Verizon’s business. Its longer-term contribution will depend on implementation, demand for connectivity and the company’s ability to translate its network investments into profitable growth.