Verizon’s Google Fiber Deal Opens a New AI Growth Lane. Here’s What It Means

Key Stats for VZ Stock

• Past week’s performance: Consolidating
• 52-week range: $38 to $52
• Valuation model target price: $59
• Implied upside: 25.3% over 2.4 years

See what Verizon’s cash flow growth could mean for your own return target (It’s free) >>>

Subscriber Growth Improves While a New AI Angle Emerges

Verizon (VZ) shares have held relatively steady in recent weeks, supported by improving subscriber trends from its July earnings report. The company added 184,000 postpaid phone subscribers in the second quarter and grew broadband net additions to 348,000, both signs that its network investments are paying off.

Churn, the rate at which customers cancel service, also improved. Consumer postpaid phone churn fell to 0.84%, which is historically low for Verizon. Lower churn means the company spends less on winning back or replacing lost customers, which supports profitability even without raising prices aggressively.

A separate development is the addition of a longer-term growth angle. Verizon signed a dark fiber agreement worth more than $1 billion to connect Google data centers, part of its broader AI Connect strategy. While this deal will not move revenue immediately, it positions Verizon to benefit as AI infrastructure spending keeps expanding across the industry.

This week brought a new competitive concern, as SpaceX’s growing mobile ambitions rattled telecom stocks broadly, including Verizon. If Verizon’s subscriber momentum continues alongside its AI infrastructure buildout, the stock’s steady performance could eventually attract more investor attention. CEO Dan Schulman told investors that AI infrastructure deals could become a new growth vector layered on top of an already improving wireless and broadband business.

See how Verizon’s cash flow and AI infrastructure bets could shape its next few years >>>

Is VZ Stock Undervalued?

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 a 25.3% total return and a 9.8% annualized return over the next 2.4 years.

Verizon trades at one of the lowest multiples among large-cap telecom names, reflecting its slow revenue growth and heavy debt load. The model assumes growth stays under 2% annually, consistent with a mature wireless market where subscriber gains come from taking share rather than expanding the overall pie.

What makes the stock interesting despite slow growth is its dividend yield, currently above 6%, combined with steady free cash flow. Free cash flow growth guidance of 9% to 10% for the year gives Verizon room to keep paying that dividend while also funding its buyback and AI infrastructure investments.

Compared to its own trading history, Verizon’s current multiple sits below its 10-year average, suggesting the market remains cautious about long-term growth even as near-term execution improves. The Google Fiber deal offers a reason that caution could eventually ease.

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Verizon vs AT&T and T-Mobile in Wireless

Verizon’s performance looks different depending on which competitor you compare it against. AT&T (T) and T-Mobile (TMUS) represent very different competitive strategies within the same wireless market.

AT&T trades at a forward P/E near 12x, slightly above Verizon, and its revenue growth has been running around 2% to 3%, similar to Verizon’s own modest pace. AT&T’s operating margins sit in the low 20% range, just below Verizon’s 24.6% assumption in this model.

T-Mobile trades at a much richer forward P/E, often above 20x, reflecting stronger subscriber growth driven by its aggressive network buildout. T-Mobile’s revenue growth has consistently outpaced both Verizon and AT&T, which explains why investors have rewarded it with a premium multiple.

Verizon’s moat remains its extensive fiber and wireless infrastructure, now being leveraged for the Google data center deal. That infrastructure advantage is harder for T-Mobile to replicate quickly, even as T-Mobile continues winning subscribers at a faster rate.

See how Verizon’s $1B Google dark-fiber deal could reshape its 2027–2028 growth profile >>>

What’s Driving VZ Stock Going Forward?

The Google fiber agreement is the clearest new catalyst to track. Management has said AI infrastructure revenue could begin contributing meaningfully in 2027, so investors should watch for additional data center deals that would validate this new growth lane.

Free cash flow guidance is another important marker. Verizon raised its free cash flow growth outlook to 9% to 10%, and hitting that target would support both the dividend and the expanded $4.5 billion share buyback authorization.

Competitive pressure from SpaceX’s satellite-based mobile ambitions is a risk worth monitoring closely. While the near-term impact looks limited, continued headlines could weigh on telecom sector sentiment even if Verizon’s own fundamentals stay solid.

If subscriber growth and churn trends keep improving, Verizon’s low valuation multiple could gradually expand. Going forward, investors should watch third-quarter churn and broadband additions for confirmation that the second-quarter trends are holding.

See how Verizon’s dividend, buybacks, and AI infrastructure bets add up over time >>>

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.

You can build a free watchlist to track VZ alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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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!