Key Stats for VZ Stock
- Past week’s performance: 1.8%
- 52-week range: $38 to $52
- Valuation model target price: $58
- Implied upside: 24.5% over 2.4 years
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A New Growth Lever Emerges From an Old Fiber Network
Verizon (VZ) rose modestly this week after posting a second-quarter beat and unveiling a deal that surprised even longtime followers of the stock. Adjusted EPS came in at $1.30, ahead of estimates near $1.26, while the company raised its full-year adjusted EPS forecast to a range of $4.99 to $5.04. Management also lifted its free cash flow growth target to 9% to 10%.
The bigger headline was buried inside the earnings call. CEO Dan Schulman disclosed that Verizon signed a dark fiber agreement with Google worth more than $1 billion, under which Verizon will use its existing long-haul and metro fiber network to connect Google’s data centers. Dark fiber means Verizon supplies the physical glass strands while Google lights them with its own equipment, a low-capital way for Verizon to monetize infrastructure it already owns.
Schulman framed the deal as the first of several. “We expect this initiative to noticeably contribute to our revenue growth starting next year and to grow substantially from there,” he told analysts, adding that Verizon expects to announce additional agreements worth multiple billions of dollars in revenue over the next several years.
The core wireless business also showed real momentum this quarter. Verizon added 184,000 postpaid phone subscribers, its best performance in five years, while churn improved for a second straight quarter. If VZ stock keeps building on this combination of wireless strength and new AI infrastructure revenue, the current 1.8% weekly gain could mark the start of a longer re-rating rather than the peak of one.
See how Verizon’s AI Connect deals could move its price target (It’s free) >>>
A Re-Rating Case Building Beneath the Surface
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue Growth (CAGR): 1.8%
- Operating Margins: 24.6%
- Exit P/E Multiple: 8.8x
Based on these inputs, the model estimates a target price of $59, implying 24.5% upside and an 8.6% annualized return by the end of 2028.
Verizon trades at a forward P/E near 9.3x, a discount that reflects years of near-flat revenue growth in its core wireless business. The AI Connect initiative doesn’t change that baseline overnight, but it does introduce a growth lever that wasn’t part of the story even a few months ago.
Margin durability is the more persuasive part of the case. Verizon’s adjusted EBITDA margin hit a record 40.1% this quarter, and management expects that trend to continue as the AI fiber deals start contributing next year. Because dark fiber deals require minimal incremental capital spending, any revenue booked from them should flow through to free cash flow at a high rate.
The multiple re-rating angle matters here since Verizon’s own five and ten-year P/E history sits well above where the stock trades today. Investors have long discounted telecom growth prospects, but a new, higher-margin revenue stream tied to AI infrastructure could justify a gradual re-rating if the Google deal is followed by similar agreements as promised.
The visual that fits best here is a forward P/E history chart showing Verizon’s own multiple range over the past five and ten years, set against where the stock trades today, to illustrate how much re-rating room exists if the AI Connect story gains traction.
Run Verizon’s numbers through TIKR’s Valuation Model and see for yourself (Free) >>>
Verizon vs. AT&T and T-Mobile: Who Owns the AI Pipes
Verizon’s closest peers, AT&T (T) and T-Mobile (TMUS), are both chasing similar fiber and enterprise opportunities, but neither has announced anything comparable to the Google deal so far. T-Mobile’s own shares fell after its most recent results, suggesting the market is being selective about which telecom growth stories it rewards right now.
Verizon’s NTM P/E near 9.3x sits below AT&T’s typical recent range, despite Verizon’s stronger consumer postpaid net additions this quarter. Verizon added 184,000 phone subscribers, outpacing AT&T’s smaller gain over the same period. Its dividend yield near 6.1% also exceeds AT&T’s, appealing to income-focused investors awaiting the AI fiber story’s development.
Where Verizon separates itself is asset ownership. Schulman noted Verizon’s long-haul and metro fiber network, built for a prior era, is now “exactly the right asset” for the AI buildout. This infrastructure gives Verizon a capital edge over rivals needing to build new fiber routes from scratch for hyperscaler contracts.
See the valuation gap that could add 15–20% to VZ’s total return >>>
What’s Driving VZ Stock Going Forward?
The most direct catalyst is the pace of new AI Connect agreements. Schulman said Verizon expects to announce additional deals worth multiple billions of dollars in revenue by year-end, and any concrete signing would give investors a clearer sense of how large this new business line could become relative to Verizon’s roughly $34 billion in quarterly revenue.
Wireless subscriber trends remain the second pillar to watch. Verizon’s new Simplicity and Verizon One plans are still ramping up. Management said gross subscriber additions beat internal forecasts by 16% this quarter. Sustained churn improvement would support the view that Verizon’s core business is genuinely strengthening, not just benefiting from temporary promotions.
Capital allocation is the third factor. Verizon expanded its 2026 share buyback target to as much as $4.5 billion after repurchasing $3.5 billion of stock in the first half of the year. Combined with a well-covered dividend, continued buybacks could provide a floor for the stock even if the AI fiber story takes longer than expected to show up in reported revenue.
Value Verizon’s dividend, buybacks, and new AI revenue together (Free with TIKR) >>>
Should You Invest in Verizon?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up VZ, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
