To everyone's astonishment on Wall Street, Verizon Communications (VZ) suddenly added more than 5% to its market value already in the first trading hours this week. That's an unusually large gain in the telecom industry, even if we talk about a business with triple-digit market caps in billions of U.S. Dollars. The reason for the upside leap on July 21 lies not so much in the fact that both the company's Q2 core profit and revenue just topped consensus estimates by nearly 2.5%. What was perhaps more important was that it has bravely lifted its own inner estimates for the lower end of adjusted earnings for the full year of 2025.

Verizon said it may get an income higher by 1% to 3% from a prior range of 0% to 3%, because of rising demand for higher-tier plans. Its EBITDA (earnings before interest, taxes, depreciation and amortization) is seen rising by 2.5% to 3.5%, versus 2% to 3.5% in the company's previous projections. Now it improves customer retention via promotions to beat rivals like AT&T, T-Mobile and Comcast in the U.S., so that Verizon's broadband net additions came in at 293,000 for the last three months. Considering that the group-wide operating sales edged up by 5.2% YoY to $34.5 billion, compared to $32.8 billion in Q2 2024, these are not all trivial numbers.

In recent years, telecoms have generally not had very high profit margins, inferior to many technology companies that offer much more extensive innovation programs. They can't make money like cloud services or at least as manufacturers of gadgets with most advanced AI options. These are simple men of labour to provide 5G and 4G LTE networks for mobile phone and home internet plus information and entertainment products including streaming services as well as some business, consumer solutions. That's why the financial results look so impressive. When waiting for the fibre-optic internet provider Frontier deal for $20 billion, Verizon's CEO Hans Vestberg noted his firm has "momentum and a clear path forward".

A relative proximity of the $40 per share technical and psychological support area is also encouraging investors. The stock dipped below $40 only for a short period of one month and a half, starting before Christmas and ending in late January, then resurfacing to as high as $47.35. The further recovery scenario, back above $45, with possible attempts to climb some higher, looks widely expected, therefore. The company's attractiveness for conservative investors is also given because Verizon pays dividends of $2.71 per share (as much as 6.6% in current price levels).

Citigroup has even reiterated its Buy rating with $48.00 as a near-term price target, citing Verizon's consumer postpaid phone gross adds by 19% YoY among other drivers and the slight financial beat against cautious investor sentiment. Morgan Stanley resumed its Equalweight coverage with a $47.00 price target, while Bank of America Securities kept a Neutral rating with a $45.00 price target, which is also 4.8% above this Monday's highs.