What Happened?
Shares of telecommunications conglomerate AT&T (NYSE: T) fell 3.8% in the afternoon session after Oppenheimer downgraded the stock to 'Perform' from 'Outperform,' citing rising competitive threats from low-Earth-orbit satellite internet providers.
The analyst warned that investors may be underestimating the disruption from services like SpaceX's Starlink, which now offers pricing on par with legacy broadband. The note highlighted that the threat is no longer distant, especially with SpaceX set to debut on Nasdaq. This new competition could pressure AT&T's broadband subscriber growth and, over time, its mobile services.
Also, the stock was affected the same 8-1 Supreme Court decision that weighed on Verizon consolidating both carriers' challenges into a single case. AT&T faces a $57 million FCC fine, slightly larger than Verizon's $47 million penalty, stemming from the same investigation into carriers unlawfully selling customer location data to third parties without user consent.
The decision is particularly pointed for AT&T because it had actually prevailed at the Fifth Circuit, which ruled the FCC's fine process unconstitutional, a win the Supreme Court has now reversed. The ruling confirms the FCC can levy forfeiture orders without a jury, and while companies can still contest collection in federal court, the decision removes AT&T's strongest legal defense. T-Mobile, which faces an $80 million fine from the same investigation, also traded lower in sympathy.
After the initial drop, the shares shed some of the losses and rose to $22.99, up 0.9% from the previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AT&T? Access our full analysis report here, it’s free.
What Is The Market Telling Us
AT&T’s shares are not very volatile and have had no moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 5.6% on the news that the company reported fourth-quarter 2025 results that surpassed Wall Street's expectations.
The company posted revenue of $33.47 billion, marking a 3.6% increase from the previous year and beating analyst estimates. AT&T also reported a GAAP profit of $0.53 per share, which was significantly ahead of the consensus forecast of $0.46. The stronger-than-expected performance in both sales and profitability appeared to drive positive investor sentiment, despite some underlying concerns noted in its report, such as a year-over-year decline in its free cash flow margin.
AT&T is down 6.4% since the beginning of the year, and at $22.99 per share, it is trading 22.4% below its 52-week high of $29.62 from September 2025. Investors who bought $1,000 worth of AT&T’s shares 5 years ago would now be looking at only $790.44.
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