Altice USA Inc. ATUS subsidiary Lightpath has witnessed healthy traction from AI (artificial intelligence)-driven demand for scalable infrastructure for seamless broadband connectivity. This all-fiber Internet service provider booked about $110 million worth of AI-driven digital infrastructure sales to hyperscalers in 2024 and boasted an order backlog of approximately $1 billion.
Much of this demand was attributable to the exponential bandwidth growth for current and future AI initiatives. With low latency and enhanced network security features, fiber optic networks like those offered by Lightpath are being increasingly sought by hyperscalers for AI deployments. This has forced communication service providers to invest considerably in LTE, broadband and fiber to provide additional capacity and ramp up the Internet and wireless networks.
With a dense all-fiber network spanning 10,800 unique route miles, Lightpath is uniquely positioned to support AI deployments within its existing footprint (New York Metro, Boston Metro, and Miami Metro) and beyond. It is set to significantly boost its fiber network capabilities through the proposed acquisition of United Fiber and Data (“UFD”).
UFD operates a 323-route mile high-fiber network stretching from New York City to Ashburn, VA, a critical link between the largest U.S. population center and the world's leading data center hub. Additionally, UFD’s 79-route mile metro network in New York City and New Jersey connects more than 350 enterprise and data center locations. This includes a high-fiber crossing of the Hudson River, enhancing Lightpath's existing infrastructure.
UFD’s geographically diverse network complements Lightpath's current infrastructure, expanding its network to more than 20,000 route miles and enhancing its connectivity with over 140 data centers and seven cable landing stations. This will allow Lightpath to offer more geographically diverse, high-capacity services across the East Coast, particularly aiding high-demand areas like Manhattan and the Ashburn data ecosystem.
Altice is focused on expanding its fiber network for increased market penetration and long-term sustainable growth. It plans to bring 100% fiber broadband to more than two-thirds of its footprint over the next few years to reach a total of 6.5 million FTTH passings by the end of 2025. Strategic acquisitions allow Altice to benefit from greater scale and operating efficiency while expanding its fiber footprint.
This expanded service capability is expected to attract more customers and increase market share. This, in turn, is likely to translate into incremental revenues and propel the stock up.
Altice carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
InterDigital, Inc. IDCC sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 15%. IDCC is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. The company designs and develops a whole range of advanced technology solutions for use in digital cellular as well as wireless 3G, 4G, and IEEE 802-related products and networks.
Arista Networks, Inc. ANET, carrying a Zacks Rank #2 (Buy), is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experiences. Arista delivered an earnings surprise of 14.8%, on average, in the trailing four quarters. It is well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Qualcomm Incorporated QCOM, carrying a Zacks Rank #2, is another solid pick. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. Qualcomm is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge.
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