Verizon’s capex increase fails to move telecom equipment stocks

Verizon (NYSE:VZ) expects to increase its capital expenditures in 2025 above market expectations, but the news failed to move telecom equipment manufacturer stocks on Tuesday.

Verizon projected capital expenditures to range between $17B and $17.5B for all of 2024. It forecasts 2025 capex to range between $17.5B and $18.5B, which was above the estimate of $17.56B.

“I always said that if we see an opportunity where we can grow faster, and we can invest more in capex, we will explain that if we go outside the normal BAU levels,” said Verizon CEO Hans Vestberg, during Verizon’s third quarter 2024 earnings call on Tuesday.

“But ultimately, if we see opportunities, remember the capital allocation priorities, we spend it in business, but we also want to explain that is something additionally we can get and that we can share with our shareholders,” Vestberg added.

Verizon plans to double its subscribers for wireless service over the next four years. It is investing heavily in C-band spectrum for 5G coverage. Vestberg said its revealed capex plans do not include the eventual emergence of 6G, which is not expected to arrive until around 2030.

Verizon shares were down 4% by early afternoon trading on Tuesday. Telecom equipment manufacturers, which look to benefit from Verizon’s higher-than-expected 2025 capex, remained mostly muted following the news.

Ericsson (NASDAQ:ERIC) was down 0.2%, Cisco (NASDAQ:CSCO) +0.3%, Nokia Oyj (NYSE:NOK) -0.26%, Arista Networks (NYSE:ANET) -2.3%, and Juniper Networks (NYSE:JNPR) -0.1%.