Verizon Communications Inc. VZ recently announced a two-year extension to its Global Network Solutions contract with the Department of Defense (DoD), bringing the total revenues for the contract, initially awarded in 2016, to over $98 million. 

The extension will focus on establishing a critical point-to-point network connection within Southwest Asia, providing essential communications capabilities for U.S. government operations. The task order is aligned with the DoD's initiatives to phase out Time Division Multiplexing technology, a process Verizon is helping facilitate across various federal agencies. By modernizing the network infrastructure, the contract ensures that U.S. military and government personnel have access to secure, reliable communications in a key strategic area.

Does VZ Stock Stand to Gain From the Extension?

Verizon is building the entire network infrastructure and ecosystem to provide the most amazing 5G experience to customers worldwide. The company’s growth strategy includes 5G mobility, nationwide broadband, mobile edge compute and business solutions. 

The continued collaboration highlights the DoD's ongoing confidence in Verizon’s ability to deliver secure, reliable communication services in critical regions. In addition to this extension, Verizon holds a number of high-value contracts with the DoD, including a 10-year, $2.67 billion agreement with the U.S. Navy and several Enterprise Infrastructure Solutions task orders worth nearly $1 billion, which include key upgrades to the Pentagon’s network infrastructure.

This task order extension with the U.S. DOD is likely to propel the stock with incremental revenue generation. The deal is also expected to strengthen Verizon’s position as a leading communications service provider in the region.

VZ’s Stock Price Performance

Shares of Verizon have gained 12.9% over the past year compared with the industry’s growth of 39.9%.

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VZ’s Zacks Rank and Key Picks

Verizon currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader industry have been discussed below.

Arista Networks, Inc. ANET sports a Zacks Rank of 1 (Strong Buy) at present. It supplies products to prestigious customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, ANET delivered an earnings surprise of 14.83%. It has a long-term growth expectation of 15.31%. 

Workday Inc. WDAY carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. 

WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support. 

Ericsson ERIC carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 22.22%. Ericsson is a leading provider of communication networks, telecom services and support solutions and is now expanding its role into an ICT (Information and Communications Technology) solutions provider.

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