Shares of AT&T Inc. (NYSE: T) were trading around $23.55 ahead of Thursday's NYSE opening, essentially flat after a sharp 4.4% selloff in the prior session. The decline followed heightened investor anxiety over the impending initial public offering of SpaceX's Starlink satellite-broadband unit, which is expected to debut on the Nasdaq on June 12.
According to Reuters, SpaceX has set a price target of $135 per share for the Starlink IPO, valuing the business at roughly $1.75 trillion. The offering marks a major shift from a private venture to a publicly traded competitor that could reshape the $1.6 trillion U.S. communications landscape. Low Earth orbit (LEO) satellites, which orbit closer to Earth than traditional geostationary satellites, offer lower latency and could make satellite internet more viable for mainstream consumers.
Oppenheimer analyst Timothy Horan downgraded AT&T from Outperform to Perform and removed his previous $32 price target, as reported by Barron's. "We think longer-term broadband subscriber growth and eventually mobile is at risk," Horan stated. He also noted that Starlink's pricing is already competitive with existing broadband services and should "decline rapidly" as new satellites increase capacity, according to MarketWatch.
The pressure is not limited to AT&T. Oppenheimer also warned that Verizon Communications Inc. (NYSE: VZ) and T-Mobile US Inc. (NASDAQ: TMUS) could face accelerating subscriber and revenue losses, though AT&T's heavier broadband exposure makes it particularly vulnerable. Verizon shares were last seen at $46.65, while T-Mobile traded at $181.45 before the bell.
In response, AT&T is doubling down on its fiber and bundling strategy. The company announced it will streamline its home internet offerings to four fiber speed tiers starting June 7, and will introduce wireless-and-home-internet bundles offering annual savings of up to $420. Jenifer Robertson, executive vice president and general manager of AT&T Consumer, emphasized the value proposition, stating the packages are "packed with value, savings, and powered by a network that performs."
CEO John Stankey has downplayed the satellite threat, calling it "a great complement" to AT&T's offerings during a JPMorgan conference last month. He reiterated that AT&T expects to add 7 million new fiber passings this year, with a similar pace in subsequent years. The company's latest investor materials highlight its dual narrative as both a cash generator and a subscriber-growth story, citing first-quarter revenue of $31.5 billion, adjusted EBITDA of $11.8 billion, and free cash flow of $2.5 billion. Postpaid phone net additions reached 294,000, while advanced-connectivity internet added 584,000 net new subscribers.
Market participants are awaiting further clarity. CFO Pascal Desroches is scheduled to speak at the Mizuho Technology Conference on June 9, and the company will report second-quarter results before the NYSE open on July 22. Meanwhile, Morningstar analyst Nicolas Owens cautioned that Starlink still faces technological hurdles and that investors may find "more attractive levels after the IPO," suggesting that current hype may be overdone.
The fundamental question for AT&T remains whether Starlink represents a genuine long-term threat to broadband growth or simply another competitive challenge for a company still investing heavily in fiber and wireless retention. The stock's trajectory may hinge more on how the market incorporates satellite competition into telecom valuations than on any single analyst downgrade.
