Verizon stock fell 3 per cent on Monday at the US Stock Market, dropping to USD 43.32. Although the company raised its annual subscriber forecast and signed a big AI deal with Amazon, third-quarter revenue of $34.3 billion fell short of estimates. Many customers also held on to phones longer.
Verizon stock is down on Monday by 3 per cent at the US Stock Market. Verizon Communications Inc-VZ stock price at NYSE fell by three per cent or 1.23 points to USD 43.32. This dip in share price came even as Verizon raised its annual forecast for wireless subscriber additions on Monday, betting on strong demand for its simplified plans, and signed an AI infrastructure deal worth more than $2 billion with Amazon Web Services.
For the third quarter, the telecom carrier reported nearly double the analysts' estimate for monthly-bill paying wireless subscriber gains at 406,000, against Visible Alpha expectations of 209,439. Shares of the New York-based company rose 2.4 per cent in premarket trading.
Verizon now expects to add between 1.1 million and 1.2 million postpaid phone subscribers this year compared with earlier projections of 750,000 to 1 million. It also raised its full-year adjusted earnings per share forecast to $5.04 to $5.06, from $4.99 to $5.04 earlier. However, third-quarter revenue of $34.3 billion fell short of analyst estimates of $34.74 billion, according to LSEG data.
Revenue was pressured by lower device upgrade volumes as customers held on to their phones longer after Verizon began cutting device subsidies. A year into CEO Dan Schulman's tenure, Verizon has pursued a broad overhaul of its business, restructuring operations and simplifying its wireless offerings. It launched its Simplicity plan in June, introducing transparent pricing and unlimited data.
Under its deal with Amazon's cloud unit, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, enabling faster, more reliable data transfers to support growing AI computing workloads. Verizon in July announced a more than $1 billion agreement with Google to connect data centers using dark fiber, highlighting how rising AI demand could open a new revenue stream beyond traditional wireless and broadband services for telecom operators.
Wall Street stocks rose early on Monday, with investors' eyes on a busy week of earnings reports from major tech firms and a US Federal Reserve decision on whether to raise interest rates once more. About 10 minutes into trading, the Dow Jones Industrial Average was up 0.4 percent at 52,424.33 points. The broad-based S&P 500 also rose 0.4 percent to 7,652.82 points, while the tech-rich Nasdaq Composite Index added 0.5 percent to 26,070.88 points.