Verizon’s $2 billion AWS fiber deal comes with a third raised forecast

Verizon said on October 26 that it has signed an AI infrastructure agreement with Amazon Web Services worth more than $2 billion. It announced the deal with its third-quarter results and raised its 2026 outlook for the third straight quarter, as Reuters reported.

What Verizon disclosed about the AWS agreement

In its earnings release, filed with the SEC, Verizon calls the agreement a “Landmark $2B+ AI Infrastructure Deal”. It says the deal establishes a commercial framework to scale distributed compute for agentic and generative AI workloads. Verizon’s CEO, Dan Schulman, said that “technology leaders are choosing our fiber network to power the next generation of AI infrastructure.”

The release does not give a contract length, a payment schedule or the volume of capacity involved. It does not name specific data centers. Verizon does not report a separate figure for its AI Connect business. The only reference is that 2026 capital spending guidance includes “success-based investments for AI Connect”. Summaries of the release published today describe the deal as Verizon supplying fiber connectivity to AWS data centers for AI workloads, but the company’s own text is vaguer than that.

Verizon ties the deal to its fiber build. It expects total fiber passings to exceed 32 million by the end of the year, and it gives a medium-term target of 40 to 50 million.

A third guidance raise, with spending held flat

Verizon now expects 1.1 million to 1.2 million postpaid phone net additions in 2026. Its earlier guidance was the upper half of a range of 750,000 to 1 million. Adjusted EPS is guided at $5.04 to $5.06, with growth of 7.0 to 7.5 percent, up from 6.0 to 7.0 percent. Free cash flow growth is now expected to approach 12 percent, up from 9 to 10 percent, or about $22.4 billion to $22.5 billion.

Capital expenditure guidance did not change, at $16.0 billion to $16.5 billion. Spending in the third quarter was $3.7 billion, down from $4.3 billion a year earlier. The AI deal is therefore presented as something Verizon expects to serve with its planned network budget, not with a larger one.

The quarter behind the raised outlook

Verizon reported 406,000 postpaid phone net additions, which it calls its strongest third quarter in five years. Total revenue was $34.3 billion, up 1.5 percent. Net income was $5.3 billion, up 5.2 percent, and adjusted EPS was $1.31, up 8.3 percent. Adjusted EBITDA was $13.8 billion and free cash flow was $7.8 billion, up 12.1 percent.

Wireless equipment revenue fell 9.0 percent to $5.1 billion, while service revenue rose 3.5 percent to $29.2 billion. NewsBytes, summarizing the results, put the consensus revenue estimate at $34.74 billion, so revenue came in below expectations even as subscriber growth beat them.

What the deal does and does not show

For readers following AI spending, the notable point is where the money goes. The agreement is about network connectivity for AI computing, not chips or models. Verizon sells fiber capacity and AWS is a customer for it. Big cloud providers need high-capacity links between and into data centers as AI workloads grow, and Verizon is positioning its fiber as a product for that demand.

For Verizon investors, the headline value is large against a quarterly revenue base of $34.3 billion. But with no stated duration, the annual revenue it implies cannot be worked out from the release. The word “framework” also leaves open how much of the $2 billion is committed and how much depends on future orders. Neither Verizon nor AWS has published further terms in the material available so far.

The figures above come from Verizon’s own release and have not been independently verified. We will update this article if AWS or Verizon publishes more detail on the scope or timing of the agreement.