Verizon Communications (VZ) is back in focus after agreeing to a fiber deal worth more than US$1 billion with Google to connect data centers for AI workloads. The partnership highlights Verizon’s push into AI-focused infrastructure services.

The Google fiber agreement lands at a time when Verizon Communications has seen a 13.54% 1 month share price return and a 19.00% year to date share price return, alongside a 3 year total shareholder return of 78.36%. These figures point to momentum that recent AI and connectivity deals, as well as new fixed income funding and product launches, are helping to keep in focus.

If you want to see which other companies are trying to tap into the same AI infrastructure trend, it is worth scanning the 55 AI infrastructure stocks.

After a sharp run and a high profile US$1b plus Google fiber agreement, Verizon Communications now sits at a very different entry point. Does the current valuation still offer a favourable balance of risk and reward for new buyers?

Most Popular Narrative: 4.5% Undervalued

On the latest numbers, the narrative fair value for Verizon Communications of $50.50 sits slightly above the recent $48.22 close, which frames a mild valuation gap that the market has not fully closed yet.

Verizon, for instance, had been on my wish list for a very long time, but I kept putting it off due to conflicting reports about the company. At the time (2023), I was able to buy it for approximately $31. Eventually, I did purchase it this week (May 5, 2026) at $47.50 because the company is showing strong figures, including for the coming years. I bought a very small batch, 5 shares. And yes, the psychology of the stock market, if I buy, it drops! I'll wait and see for now, and if it drops further later, I'll just buy another small amount to maintain the average purchase price. This purchasing method has already saved me a lot of money over the past few years!

The fair value in this narrative leans on a specific mix of revenue growth, profit margins and future earnings multiples that do not line up neatly with recent headline earnings trends. Curious which assumptions Silvester leans on most, and how they connect to a higher long term value for Verizon Communications.

Result: Fair Value of $50.50 (UNDERVALUED)

However, this Verizon Communications narrative could be challenged if AI infrastructure spending slows or if higher funding costs pressure margins and future cash generation.

Another View: Verizon Communications Through Earnings Multiples

A second lens on Verizon Communications comes from its 12.4x P/E ratio. That is higher than close peers at 9.9x, yet below the global telecom average of 16.7x and under the fair ratio estimate of 15.5x. This mix suggests both valuation risk and potential upside. Which side matters more to you right now?

For a closer look at how this P/E gap could close over time, including what the fair ratio implies if sentiment shifts, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Given the mix of optimism and caution around Verizon Communications, it makes sense to look at the numbers yourself and decide quickly where you stand. To help frame both sides of the argument, take a moment to review the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Verizon Communications?

If you stop with Verizon today, you could miss other opportunities that fit your goals just as well. Take a few minutes to scan these ideas now.

• Target steady compounding by reviewing companies that show staying power on the 88 resilient stocks with low risk scores.
• Hunt for potential value opportunities by checking companies that appear priced below their fundamentals on the 51 high quality undervalued stocks.
• Strengthen your income and stability mix by researching the 11 dividend fortresses that might complement a position in Verizon Communications.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.