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Wireless Telecommunications · #78 in the Retail 100

AT&T

T
Our rating
hold
12-month target
$24.76 +15.8%
Expected vs. S&P 500
+2.5 ptsSee the math
Next earnings
Jan 27In 83 days

AT&T borrowed for a $23B spectrum deal yet hands shareholders nearly all its $18B-plus 2026 free cash flow, so its debt load lightens mainly through profit growth.

Summary

AT&T earns most of its money from monthly phone bills, plus the phones it sells to win them, and it is building fiber home internet to keep those customers from leaving. Profits are growing, but telecom stocks fell this year on fears that SpaceX will sell phone plans. AT&T borrowed heavily for spectrum yet kept about $10B of buybacks this year. Its debt only falls back to target if earnings keep rising about 10% a year; asset sales help at the margin.

$21.39
-$4.71 (-18.05%)Past year
What AT&T does

AT&T is one of three big U.S. phone carriers and a large builder of home fiber internet. Monthly wireless bills are most of its revenue, and home internet helps keep those customers.1,8,18,19

What it sells

  • Wireless service55% of revenue, Q3 2026

    Monthly phone and data plans. The steady, high-margin core that pays for the network and the dividend.

  • Phones and devices17% of revenue, Q3 2026

    Handsets sold on installment plans. Large in revenue but earns little; it exists to sign and keep plan customers.

  • Home internet9% of revenue, Q3 2026

    AT&T Fiber plus Internet Air, a home service over the cell network. Its fastest-growing line, up 23% a year, partly from buying Lumen's customers.

  • Business connectivity9% of revenue, Q3 2026

    Fiber and data links for companies. Newer fiber services grow while older business products shrink about 15% a year.

  • Legacy copper5% of revenue, Q3 2026

    Old phone lines and DSL on copper wires. Still profitable but shrinking about 25% a year; AT&T plans to shut most by 2029.

Who buys it

Mostly U.S. households, plus businesses and first responders on its FirstNet network. AT&T had about 110 million U.S. retail wireless subscribers in September 2026. Its Mexico wireless arm, 4% of revenue, is being sold for about $2B.

Where you've seen it

Cricket Wireless, the low-cost prepaid brand with its own stores, is owned by AT&T.

The backstory

Phone bills are AT&T's core, but U.S. wireless is crowded, so CEO John Stankey is betting on bundles: sell fiber internet to the same households, which management says makes them less likely to leave. AT&T bought Lumen's consumer fiber business and $23B of EchoStar spectrum, pushing debt up. Now SpaceX plans its own phone service, which raises the stakes on keeping customers.

How the business makes money

Why AT&T sells fiber to keep phone customers1,2,4,5,8,9,20,19

  1. Step 1

    Monthly phone bills bring in most of AT&T's profit, and wireless service revenue grew 5% last quarter.

  2. Step 2

    AT&T sells fiber home internet to the same households, and 43% of them now take both services.

  3. Step 3

    Bundled households leave less often, management says, which keeps the phone revenue coming.

  4. Step 4

    That cash pays a $1.11 dividend and about $10B of buybacks this year.

  5. What shareholders get

    Debt from its spectrum and fiber deals falls back mainly as profit grows, with some help from selling Mexico and half a fiber venture.

Advantages

A fiber network next to its phone customers

Major advantage

AT&T's biggest advantage, because SpaceX has no home line to bundle with a phone plan. Bundled households churn less and buy faster speeds, management says, so each fiber home protects phone revenue. Over 39 million locations can get AT&T Fiber.1,8

Fresh spectrum for capacity

Strong advantage

Strong, and owned outright, though bought with debt. The $23B EchoStar purchase added mid-band airwaves for capacity and low-band airwaves that reach farther and into buildings, letting AT&T carry more data without building as many cell sites.9

FirstNet and satellite partners

Supporting

A supporting edge. AT&T runs FirstNet, the national network for first responders, works with AST SpaceMobile on satellite-to-phone service, and in September agreed a satellite venture with Verizon and T-Mobile to cover dead zones.17,19

What's changing

Bigger, more indebted, and facing SpaceX

In 2026 AT&T closed the Lumen fiber deal in February and the $23B EchoStar spectrum deal in July, then agreed in October to sell its Mexico unit and half of a fiber venture. Telecom stocks fell in late June on a report that SpaceX was weighing phone plans, and again on October 9 when it agreed to buy spectrum. CFO Pascal Desroches hands over to Jennifer Biry on January 1.1,4,7,9,16,19

Competitors

Who else an investor would consider, and how they compare.

CompanyMarket valueWhat it doesCompared with AT&T
AT&Tthis stock
$144.16B
AT&T is one of three big U.S. phone carriers and a large builder of home fiber internet. Monthly wireless bills are most of its revenue, and home internet helps keep those customers.
VerizonVZ—The largest U.S. carrier by wireless revenue, now adding fiber after buying Frontier.Same bundle strategy; AT&T's fiber footprint is larger and further along.15
T-MobileTMUS—Wireless-first carrier that grew mainly by winning phone customers from AT&T and Verizon.T-Mobile leans on its wireless network; AT&T bets on owning home fiber too.16
ComcastCMCSA
$78.30B
Cable internet giant that sells cheap phone plans riding Verizon's network.Comcast bundles phones onto cable internet; AT&T bundles fiber onto its own network.
SpaceX (Starlink)SPCX
$1.97T
Satellite internet company buying spectrum and weighing its own retail phone plans.Starlink starts strongest in rural areas; AT&T's fiber bundle defends suburbs and cities.7,16