According to DCD, American Tower Corporation reported a strong third quarter with revenue up 7.7 percent to $2.71 billion, while net income surged 216.9 percent to $913 million primarily due to foreign currency losses in the prior year period. The company’s data center business showed particularly strong performance with property revenue increasing 14 percent, driven by record retail new leasing activity at CoreSite facilities. CEO Steven Vondran highlighted that approximately 75 percent of their 42,000 US towers have been upgraded with 5G equipment, leaving significant runway for future growth as carriers complete coverage rollouts. The company also noted growing demand from AI-related workloads and expansion of edge data centers across multiple US markets including Pittsburgh, Jacksonville, Atlanta, Austin, and Denver. This robust performance across multiple business segments indicates a broader infrastructure transformation underway.
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The Tower Company Evolution
What makes American Tower‘s performance particularly noteworthy is how it reflects the evolution of traditional tower companies into diversified infrastructure providers. Historically, these companies were primarily passive landlords for telecom carriers, but American Tower’s strategic pivot into data centers and edge computing represents a fundamental business model transformation. The 14 percent growth in data center revenue isn’t just incremental—it’s validation that their CoreSite acquisition and edge deployment strategy is paying dividends. This diversification is crucial as the traditional tower business faces eventual saturation once 5G deployments mature.
The Spectrum Deployment Catalyst
The pending spectrum auctions represent a significant catalyst that the market may be underestimating. With the FCC reauthorized to conduct spectrum auctions and AT&T’s $23 billion acquisition from EchoStar, we’re looking at a substantial deployment cycle ahead. Historically, when carriers acquire spectrum, they deploy it aggressively to generate returns on their massive investments. The mid-band spectrum particularly requires dense tower networks due to its propagation characteristics, which plays directly into American Tower’s portfolio of urban and suburban sites. What’s not being discussed enough is how this spectrum deployment will drive not just initial equipment installations but ongoing upgrades as carriers optimize their networks.
The AI Workload Reality Check
While the company’s enthusiasm about AI-related workloads is understandable, there are important distinctions to make between different types of AI infrastructure demand. The mention of inferencing, machine learning models, and GPU-as-a-Service suggests they’re capturing the more immediate, practical applications rather than the massive training clusters that dominate headlines. This is actually a smarter positioning—inferencing workloads require distributed infrastructure closer to end-users, which aligns perfectly with their edge strategy. The liquid cooling capabilities mentioned by CFO Rodney Smith indicate they’re preparing for the high-density computing demands that AI workloads will increasingly require.
Shifting Competitive Landscape
American Tower’s success comes amid intensifying competition from both traditional players like Crown Castle and SBA Communications, and new entrants in the edge computing space. Their edge data center deployments in markets like Raleigh, Pittsburgh, and Austin represent a first-mover advantage in what could become a crowded space. However, the real competitive moat isn’t just their physical towers—it’s the interconnection ecosystems they’ve built through CoreSite. This creates a virtuous cycle where network density attracts more customers, which in turn makes their locations more valuable for interconnection.
The International Growth Question
While the focus has been on US performance, the international markets present both opportunity and risk. With nearly 150,000 towers globally compared to 42,000 in the US, the international portfolio represents significant untapped potential as Vondran mentioned “less mature markets lease up over time.” However, these markets also come with currency volatility, regulatory uncertainty, and different deployment timelines for 5G. The massive 216.9 percent net income increase being attributed to foreign currency losses in the prior period underscores the volatility inherent in their global operations.
Realistic Growth Trajectory
The company’s projection of 13 percent year-on-year data center growth appears achievable given current market trends, but several factors could influence the actual trajectory. The data center market is experiencing unprecedented demand from cloud migration and digital transformation, but also faces supply chain challenges and power availability constraints. American Tower’s advantage lies in their existing real estate portfolio and power infrastructure at tower sites, which can accelerate edge deployment timelines. However, the edge computing market remains nascent, and widespread adoption timelines are still uncertain despite the enthusiastic projections from industry players.
