American Tower Sees 5G, AI and CoreSite Demand Fueling Growth

Key Points

• Wireless infrastructure demand is gaining multiple catalysts: American Tower expects 5G densification, future 6G deployments, additional spectrum and AI-driven data traffic to support tower growth. Management said 800 MHz of new spectrum should lead to more equipment deployments and continued capacity investment.
• CoreSite is experiencing strong AI and cloud-related demand. The interconnection business has expanded capacity by roughly 1.5 times since its acquisition, with construction at record levels and demand exceeding current availability.
• American Tower is targeting another 200 to 300 basis points of margin expansion while prioritizing dividends, internal investments and selective buybacks. The company is also gradually reducing emerging-market exposure and recently deployed about $600 million on opportunistic share repurchases.

American Tower NYSE: AMT President and CEO Steve Vondran said the company is positioning for a series of demand catalysts across its tower and data center businesses, with management focused on organic growth, margin expansion and disciplined capital allocation.

Speaking at the Goldman Sachs Communacopia + Technology Conference, Vondran said American Tower sees four self-reinforcing drivers for wireless infrastructure demand: 5G densification, the eventual transition to 6G, additional spectrum availability and growing network traffic associated with artificial intelligence.

“For the first time in a long time, we’re seeing four different catalysts for building in the business,” Vondran said. The company’s objective is to capture that demand while delivering industry-leading adjusted funds from operations, or AFFO, per-share growth.

Wireless demand catalysts

Vondran said 5G network deployments are moving from an initial coverage-oriented phase, which is largely driven by equipment amendments on existing sites, toward a capacity-focused phase that requires more network densification. American Tower is already seeing a shift in its new-business mix toward co-location activity from amendments, he said.

He characterized 6G as a longer-term driver, noting that standards bodies are expected to release standards in 2029, with commercial deployments potentially beginning around 2030 or 2031. Early proofs of concept and network activity could occur before broader commercial deployments, he added.

Spectrum availability is also expected to support tower demand. Vondran said the legislation referred to as the “Big Beautiful Bill” earmarked 800 MHz of spectrum to come to market over several years. Historically, he said, additional spectrum has resulted in more equipment being placed on towers.

“More spectrum equals more equipment,” Vondran said. He added that the 800 MHz is needed to help carriers meet mobile-data demand, which he said is growing at double-digit rates annually. Carriers will address required capacity growth through technology upgrades, spectrum and site densification, according to Vondran.

On satellite connectivity, Vondran said American Tower views satellite networks as complementary to terrestrial wireless infrastructure rather than a threat. He said the company took an investment position in AST to obtain a board seat and monitor developments. Satellite service is most applicable in ultra-rural areas, he said, where American Tower has limited tower exposure and where sites tend to be less productive because they do not support multiple carriers.

Margins and international portfolio

American Tower has expanded margins by roughly 300 basis points over the past several years and is targeting another 200 to 300 basis points of expansion over the next few years, Vondran said.

Management’s margin plan includes managing land costs globally, using a global supply chain, applying its U.S. site-maintenance practices across international markets and maintaining control over selling, general and administrative expenses. Vondran also said AI could eventually generate additional cost savings, though he described those efforts as early stage.

Regarding leasing growth, Vondran declined to provide 2027 guidance ahead of the company’s planned February outlook. He said that after normalizing for Dish-related churn, 2026 organic tenant billings growth is about 4.5%, including roughly 2.5% from new leases and amendments. That 2.5% contribution was also seen in 2025, he said, describing it as consistent with a normal investment environment.

Internationally, Vondran said American Tower is reducing its exposure to emerging markets over time to rebalance a portfolio that had become too heavily weighted toward those markets. The company has divested assets in the Philippines and Bangladesh, but he said there is no requirement to sell additional assets. Instead, American Tower will evaluate whether sales create greater value than retaining assets and harvesting their cash flow.

In Europe, Vondran said the company feels well positioned through its relationship with Telefónica. He said carrier consolidation could create opportunities as stronger combined carriers increase network investment and seek to expand coverage.

CoreSite and capital allocation

Vondran said CoreSite, American Tower’s data center and interconnection business, is benefiting from strong demand tied to cloud connectivity, enterprise requirements and AI inference workloads. He emphasized that CoreSite is not solely a data center platform, describing it as an interconnection hub serving cloud providers, networks and enterprise customers.

The company has increased CoreSite capacity by about 1.5 times since acquiring the business and has more capacity under construction than at any previous time, Vondran said. Demand exceeds what CoreSite can currently serve, he added, allowing the company to select creditworthy customers that support its interconnection ecosystem.

American Tower’s capital-allocation priorities begin with funding its dividend, followed by internal investment opportunities, including CoreSite expansion and European build-to-suit projects. The company then weighs mergers and acquisitions, share repurchases and further debt reduction based on expected long-term returns.

Vondran said American Tower has deployed about $600 million into share repurchases over the past several months, including the latter portion of the prior year. He said the company favors opportunistic buybacks rather than a programmatic approach.

While Vondran called towers the “best business model ever made,” he said the company has found limited opportunities recently to build or acquire towers at scale in the U.S. Data centers have therefore represented an attractive investment outlet, while land buybacks remain a safe, opportunistic investment that also protects tower revenue streams.

About American Tower (NYSE:AMT)

American Tower Corporation NYSE: AMT is a global owner, operator and developer of wireless communications infrastructure. The company leases space on communications sites, including towers, rooftops and other structures, to wireless carriers, broadcasters, government agencies and other customers. Its infrastructure supports wireless networks and the transmission of voice, data and video services.

In addition to traditional macro towers, American Tower provides distributed antenna systems and other in-building or venue-based communications solutions designed to improve wireless coverage and capacity.

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