AT&T Inc. (NYSE:T) suffered its worst weekly decline since July 2022, tumbling 9.4% to close at $20.58. The sell-off erased approximately $15 billion in market capitalization, reducing the telecom giant's total value to $144.6 billion. The broader market moved in the opposite direction, with the S&P 500 gaining 1.8% during the holiday-shortened week.
U.S. equity markets were closed Friday for the Independence Day holiday, with the New York Stock Exchange observing July 3 as the official market holiday. AT&T's next corporate event is the record date for its common dividend, set for July 10. The company will pay $0.2775 per share quarterly, representing an annual yield of roughly 5.4% at current prices.
Starlink Sparks Investor Fears
The catalyst for the sharp decline was not a new earnings report but growing concern over SpaceX's (NASDAQ:SPCX) ambitions in the wireless market. According to Reuters, SpaceX has held senior-level talks with Charter Communications (NASDAQ:CHTR) about a potential U.S. consumer mobile partnership, and has informed investors of plans to launch a Starlink mobile service that would compete directly with Verizon (NYSE:VZ), AT&T, and T-Mobile (NASDAQ:TMUS).
While satellite-based mobile traffic remains negligible—T-Mobile reported that just 0.0002% of its May network usage came from satellite—the market is pricing in future disruption. The drop in AT&T's stock wipes out nearly 86% of Charter's entire equity value ($17.4 billion), highlighting how heavily investors are discounting the potential impact of low-earth-orbit satellite systems.
Analyst Downgrade Adds Pressure
Oppenheimer analyst Timothy Horan downgraded AT&T to Perform from Outperform last month and removed his $32 price target. In a note cited by Barron's, Horan wrote: "We think longer-term broadband subscriber growth and eventually mobile is at risk" from competition posed by satellite networks.
AT&T executives have pushed back, characterizing satellite as a complementary add-on rather than a replacement. CFO Pascal Desroches described satellite as a "great solution" for rural areas lacking other options. The company is also pursuing a carrier-led joint venture with T-Mobile and Verizon to develop direct-to-device satellite technology aimed at filling coverage gaps.
Earnings on Deck
AT&T is scheduled to report second-quarter results before the market open on July 22, with an earnings call at 8:30 a.m. ET. In the prior quarter, the company posted $31.5 billion in revenue, $11.8 billion in adjusted EBITDA, and $2.5 billion in free cash flow. It added 294,000 postpaid phone lines and 584,000 fiber internet customers.
Management has maintained its full-year 2026 guidance of adjusted EPS between $2.25 and $2.35 and capital expenditures of $23 billion to $24 billion. Investors will be watching closely to see whether fiber and wireless bundling can sustain subscriber trends amid mounting concerns over Starlink's potential to disrupt the mobile market.
