Verizon Stock Falls Despite 406,000 New Subscribers and $2 Billion Amazon AI Deal

Verizon stock (VZ) fell approximately 2.5% in early Monday trading despite reporting 406,000 new postpaid phone subscribers and announcing an artificial intelligence infrastructure agreement worth more than $2 billion with Amazon Web Services.

The decline marked a reversal from Verizon's earlier 2.4% premarket gain, as investors weighed the company's impressive subscriber recovery against weaker-than-expected revenue and intensifying wireless competition.

According to Verizon's October 26 earnings release, third-quarter revenue increased 1.5% to $34.3 billion but missed Wall Street's approximately $34.74 billion forecast. Adjusted earnings reached $1.31 per share, exceeding expectations of roughly $1.27.

The initial optimism surrounding Verizon's earnings beat therefore faded as regular trading began.

Verizon Adds 406,000 Subscribers but Revenue Misses Expectations

Verizon's subscriber growth was the strongest for a third quarter in five years, increasing more than 820% from the 44,000 additions recorded a year earlier.

The result also nearly doubled Visible Alpha's estimate of approximately 209,000 additions, suggesting that CEO Dan Schulman's simplified pricing strategy is attracting customers.

However, equipment revenue declined 9% as subscribers kept their phones longer and Verizon reduced expensive device subsidies.

That tradeoff helps explain the apparent contradiction between stronger wireless demand and disappointing total revenue.

Verizon nevertheless raised its annual forecast for postpaid phone additions to 1.1 million–1.2 million, up from 750,000–1 million previously.

The company also increased its adjusted earnings outlook to $5.04-$5.06 per share and reported $7.8 billion in quarterly free cash flow, up 12.1%.

Those improvements suggest that the business is becoming more efficient, even as investors question the pace of overall revenue expansion.

Amazon's $2 Billion AI Deal Opens Another Revenue Opportunity

Verizon's agreement with Amazon Web Services establishes a commercial framework for high-capacity fiber connectivity supporting distributed computing and AI workloads.

The arrangement, valued at more than $2 billion, follows a separate agreement worth over $1 billion with Google to connect data centers.

For Verizon, these partnerships create an opportunity to benefit from the AI infrastructure expansion without competing directly with Nvidia or developing large AI models.

Instead, the company can supply the physical connections required to move enormous volumes of information between computing facilities.

Amazon's earlier AI chip investments demonstrate how hyperscalers are expanding the different components of their computing infrastructure.

However, Verizon has not disclosed enough detail to establish how quickly the Amazon contract value will translate into revenue or earnings.

That distinction matters as investors increasingly examine returns on AI spending rather than treating every infrastructure announcement as an immediate profit catalyst.

SpaceX's Starlink Expansion Adds Pressure to Verizon Stock

Verizon also faces an emerging challenge from Elon Musk's SpaceX, which is expanding beyond satellite connectivity toward direct competition in mobile telecommunications.

Earlier this month, SpaceX's approximately $8 billion spectrum agreement triggered a sharp selloff in Verizon, AT&T and T-Mobile shares.

More recently, reports that SpaceX was seeking access to 80,000 U.S. cell sites heightened concerns about competition with established mobile operators.

The proposal does not establish that SpaceX already operates a nationwide terrestrial network, but it raises questions about Verizon's future competitive position.

Schulman argued that replicating Verizon's terrestrial infrastructure would require four to six years and $300 billion–$500 billion in investment, emphasizing the scale of the company's existing network advantage.