Verizon Soars on Strong Wireless Growth, Unveils $25 Billion Buyback
Verizon's Earnings Spark Rally, Fueling Optimism on Wireless Turnaround
New York – Verizon Communications (NYSE:VZ) led a broad telecom sector rally on Friday, with its stock jumping 11.83% to close at $44.52. The surge followed the company's fourth-quarter 2025 earnings report, which not only topped analyst estimates but also provided a confident outlook for 2026, anchored by a newly authorized $25 billion share buyback program.
Trading volume skyrocketed to 113.1 million shares, nearly triple the stock's three-month average, signaling intense investor interest. The results appear to validate CEO Hans Vestberg's strategy of focusing on volume growth and cost efficiency to reignite the wireless business after a period of intense competition.
The broader market faced headwinds, with the S&P 500 slipping 0.45% and the Nasdaq Composite falling 0.94%. However, Verizon's positive momentum lifted rivals AT&T (NYSE:T) and T-Mobile US (NASDAQ:TMUS), which rose 4.32% and 4.19%, respectively, as investors reassessed the industry's growth and pricing stability.
Earnings Beat and Upbeat Guidance
Verizon reported adjusted earnings per share of $1.09 on revenue of approximately $36.4 billion, driven by more than 1 million net customer additions. More importantly, management projected 2026 adjusted EPS in the range of $4.90 to $4.95 and forecast free cash flow of at least $21.5 billion.
"The numbers tell a clear story of momentum," said Sarah Chen, a telecom analyst at Horizon Capital Advisors. "Exceeding a million net adds shows their competitive offers are resonating. The $25 billion buyback is a powerful statement of confidence in their cash flow generation, shifting the narrative back to shareholder returns."
The company aims to add 750,000 to 1 million retail postpaid phone subscribers in 2026, a volume-driven approach intended to stabilize wireless service revenue while improving profitability through stringent cost controls.
Challenges and Investor Scrutiny Remain
Despite the bullish report, analysts note that Verizon must execute flawlessly. A recent nationwide network outage, now under review by the Federal Communications Commission (FCC), has heightened focus on service reliability. The company must balance aggressive capital returns with sustained network investment and customer service quality.
"This is a classic 'show me' story," remarked Michael Rossi, a portfolio manager at Oakcrest Funds. "One good quarter doesn't fix years of market share loss. The buyback is nice, but I'll be watching churn rates and capex closely. Can they really grow subscribers while cutting costs and maintaining network quality? The math is tight."
Market Reaction and Commentary
David Park, Retail Investor: "Finally! I've been holding VZ for years watching it drift. This report feels like a turning point. The buyback is huge, and the subscriber growth is real. I'm cautiously optimistic this is the start of a real recovery."
Linda Fitzgerald, Financial Advisor: "Verizon is demonstrating operational discipline. The guidance for strong free cash flow allows for both shareholder returns and necessary investment. It's becoming a compelling total-return story for income and growth portfolios."
Marcus Thorne, Independent Analyst (Blog: 'The Skeptical Investor'): "Are we all just memory-holing the massive outage a few weeks ago? They're throwing $25 billion at shareholders instead of fully fortifying the network that just failed millions. This feels like a short-term sugar high. Let's talk when the FCC finishes its investigation and the promotional subscriber offers roll off."
Jennifer Lee, Pension Fund Manager: "The scale of the buyback is attention-grabbing and will provide support for the stock. However, the long-term thesis still hinges on whether they can achieve sustainable service revenue growth in a saturated market. Today's pop is justified, but the real work continues."
Disclosure: The Motley Fool recommends T-Mobile US and Verizon Communications.