Is The Next Leg In Verizon Stock Riding On Customers Who Stay?
Verizon Communications (VZ) shares sit at the top of a $36.56-to-$50.59 52-week range, up 22.7% over the past twelve months. The exciting part of that story is the dark fiber Verizon has begun selling into AI infrastructure builds. The part that can actually move the stock is duller. Verizon has finally started keeping its customers.
What Is Verizon Giving Up To Keep Customers From Leaving?
Consumer postpaid phone churn was 84 basis points in Q2 2026, down from 90 basis points in Q1 2026 and 95 basis points in Q4 2025. By its own account, churn had been rising quarter after quarter before that. Two straight quarters of decline is the first real evidence that the direction has changed.
Verizon launched a set of offers in mid-June 2026, too late to have caused that improvement. Simplicity, its new $45 wireless plan, separates phone subsidies out of the price. Verizon One puts mobility and broadband on one bill at $70 with taxes and fees included. A new loyalty program eliminated activation and upgrade fees.
That is money Verizon used to collect. Acquisition economics were already improving without it. Consumer promotional cost of acquisition improved by about 15% year over year in Q2 2026, and promotional cost of retention by about 17%. Postpaid phone net adds were 184,000 in Q2 2026 against 55,000 in Q1 2026.
How Much Of That Reaches Revenue?
Mobility and broadband service revenue grew 2.8% year over year in Q2 2026, up from 1.6% in Q1 2026. Management has guided it to approach 3% growth in Q3 2026 and roughly 4% in Q4 2026. Free cash flow guidance moved up to 9% to 10% growth from about 7% or more. Verizon has now raised components of its full-year 2026 guidance in two consecutive quarters.
The AI fiber leg is real and could become a meaningful new source of growth. A recently signed dark fiber agreement is valued at over $1 billion of contract revenue, with no timeframe disclosed. Management expects further deals by the end of 2026 worth multiple billions of dollars in revenue over the next several years, contributing noticeably to revenue growth from 2027. The scale of the opportunity will become clearer as these contracts begin contributing to revenue.
What Should You Watch Before You Buy Verizon?
Wireless service revenue, a narrower line inside mobility and broadband, fell 0.7% year over year to $20.8 billion in Q2 2026, and management expects it to be roughly flat for the full year 2026, which requires growth across the second half of 2026. Verizon gave those fees up, and volume and lower churn have to replace them.
The improvement is already showing up in the shares. Verizon returned 10.5% over the past three months against 3.4% for the S&P 500, though its six-month return is 1.3%, so all of that six-month gain came in the last three months. The upside case is a compounding one. It works if churn keeps falling and wireless service revenue turns positive, and it is worth weighing against the other companies whose guidance is climbing.
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