Verizon said in its third-quarter release on 26 October 2026 that it signed an agreement valued at $2.0+ billion with Amazon Web Services that “establishes a commercial framework to scale distributed compute and meet the real-time demands of agentic and generative AI workloads.” Under the deal, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, Reuters reported via CNBC.
The same release raised Verizon’s full-year 2026 guidance for the third consecutive quarter. In July, Verizon announced a more than $1 billion agreement with Google to connect data centers using dark fiber, Reuters noted, as our Google dark fiber piece reported.
Business Pill · BACKLOG
A short explainer on backlog: revenue that is signed but not yet earned. It teaches the general idea only and says nothing about Verizon or AWS.
The key insight: As we read it, the deal sits on the same release as the guidance raise: Verizon valued its AWS agreement at $2.0+ billion and, in the same document, raised its 2026 outlook for postpaid phone additions, adjusted EPS and free cash flow.
The figures below come from Verizon’s third-quarter 2026 earnings release, filed with the SEC as Exhibit 99 to a Form 8-K on 26 October, unless marked.
Item
What the release says
AWS agreement
Valued at $2.0+ billion; “establishes a commercial framework to scale distributed compute” for agentic and generative AI workloads
What Verizon provides
High-capacity fiber-optic connectivity for AWS data centers (Reuters via CNBC)
2026 capital expenditures
$16.0 billion to $16.5 billion, “inclusive of success-based investments for AI Connect”
Postpaid phone net additions, Q3
406,000
Adjusted EPS, Q3
$1.31, up 8.3% year over year
Free cash flow, Q3
$7.8 billion, up 12.1% year over year
Revenue, Q3
$34.3 billion, against analyst estimates of $34.74 billion (LSEG, via Reuters/CNBC)
Source: Verizon third-quarter 2026 earnings release (SEC Form 8-K, Exhibit 99), 26 October 2026; Reuters via CNBC, 26 October 2026, where marked.
Chief executive Dan Schulman said in the release: “At the same time, technology leaders are choosing our fiber network to power the next generation of AI infrastructure.”
Verizon’s 2026 guidance before and after its 26 October raise: free cash flow growth from 9.0-10.0 percent to approaching 12.0 percent; cash flow from operations growth from 2.0-4.0 percent to 3.5-5.0 percent; adjusted EPS growth from 6.0-7.0 percent to 7.0-7.5 percent. Dots mark the top of each range, which is our choice. Source: Verizon third-quarter 2026 earnings release.
The Raised Outlook
The release lists the 2026 targets Verizon raised, each against the range it gave before.
2026 guidance
Before
Raised on 26 October
Postpaid phone net additions
Upper half of 750,000 to 1.0 million
1.1 million to 1.2 million
Adjusted EPS
6.0 to 7.0 percent growth
$5.04 to $5.06, or 7.0 to 7.5 percent growth
Cash flow from operations
2.0 to 4.0 percent growth
3.5 to 5.0 percent growth
Free cash flow
9.0 to 10.0 percent growth
Expected to approach 12.0 percent growth
Source: Verizon third-quarter 2026 earnings release (SEC Form 8-K, Exhibit 99), 26 October 2026.
Connecting the Coverage
Verizon’s July agreement with Google, valued at more than $1 billion, connects data centers using dark fiber, Reuters noted on 26 October; our Google dark fiber piece covered that deal on 28 July.
Amazon already ties a supplier stake to optics. 3M said in a Form 8-K filed on 19 October 2026 that most of a warrant it issued to an Amazon subsidiary vests as Amazon pays for “optical connectivity and other Data Center products,” as our Lumentum and 3M piece reported.
Inside the data center, Nvidia confirmed plans with SPIL to expand optical-engine capacity, as our Nvidia and SPIL piece reported, and some Samsung Electro-Mechanics capacitors carry a 61-week standard lead time at DigiKey, as our packaging squeeze piece reported.
The Structural Read
As we read it, the AWS agreement is described in commercial terms, not engineering ones: the release says it establishes a commercial framework, and Reuters, as carried by CNBC, says Verizon will provide high-capacity fiber-optic connectivity for AWS data centers.
As we read it, the AWS deal follows an earlier data-center agreement: Reuters noted that Verizon in July announced a more than $1 billion agreement with Google to connect data centers using dark fiber.
As we read it, the spending line is where the two businesses meet: Verizon kept 2026 capital expenditures at $16.0 billion to $16.5 billion, which the release says is inclusive of success-based investments for AI Connect.
Dan Schulman, Verizon CEO, third-quarter 2026 release, 26 October 2026
“technology leaders are choosing our fiber network to power the next generation of AI infrastructure”
Three Implications
FOR VERIZON SHAREHOLDERS The release raised full-year 2026 guidance for the third consecutive quarter, including postpaid phone net additions of 1.1 million to 1.2 million.
FOR AWS The release says the agreement is meant to meet the real-time demands of agentic and generative AI workloads.
FOR AI INFRASTRUCTURE Reuters, as carried by CNBC, says the deal provides high-capacity fiber-optic connectivity for AWS data centers, following the July Google dark fiber agreement.
The framework describes AI as “a multi-layered stack, almost like a layered cake of interconnected technologies and infrastructure.”
As we read it, Verizon’s AWS and Google agreements sit in the connectivity part of that stack, between data centers. The framework was published in May 2026 and does not discuss these deals.
What Is Not Established
The release values the AWS agreement at $2.0+ billion but does not give its term, the timing of revenue, or the number of data centers or routes it covers. It does not say how much of the $16.0 billion to $16.5 billion of capital expenditures goes to AI Connect. The fiber-optic description of the deal is Reuters’, as carried by CNBC. We did not contact Verizon or AWS.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Verizon signed an agreement valued at $2.0+ billion with AWS for AI workloads, under which Reuters says it will provide fiber-optic connectivity for AWS data centers, and it raised its 2026 guidance for postpaid phone additions, adjusted EPS and free cash flow. It follows Verizon’s more than $1 billion dark fiber agreement with Google in July.
A note on sourcing. The agreement value, guidance and quarterly figures are from Verizon’s third-quarter 2026 earnings release, filed with the SEC on 26 October 2026, which we read on SEC EDGAR. The fiber-optic description of the AWS deal, the revenue estimate and the Google agreement are from Reuters, as carried by CNBC. This is not investment advice. We did not contact Verizon or AWS.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
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