Verizon Communications

This article first appeared on GuruFocus . Verizon Communications ( NYSE:VZ ) shares climbed about 4% on Friday after the telecom company said it secured a fiber infrastructure agreement with Alphabet's Google (GOOGL) valued at more than $1 billion. Verizon said the long-term agreement will provide dark fiber connectivity linking Google's data centers as demand for artificial intelligence infrastructure continues to expand. The company expects the project to support AI data center, compute cluster and regional network connectivity. Warning! GuruFocus has detected 3 Warning Signs with VZ.

Is VZ fairly valued? Test your thesis with our free DCF calculator. During the earnings call, Verizon said the Google agreement is expected to be the first of several AI infrastructure contracts. Management said additional deals could be announced before year-end and may generate multiple billions of dollars in revenue over the coming years. Verizon also said it is repurposing some central offices into inference edge data centers to support AI workloads.