NEW YORK, July 27, 2026 — AT&T Inc. (NYSE:T) shares continued their upward momentum in premarket trading Monday after a robust 10.6% weekly gain, driven by strong performance in its Advanced Connectivity segment that more than offset the decline in legacy copper operations. The stock was down 0.3% at $24.05 as of 7:00 a.m. EDT, following a 5.1% jump on Friday to close at $24.13.
The company’s second-quarter earnings highlighted a key metric: the replacement rate, which measures how much growth in advanced services compensates for copper declines. Advanced Connectivity operating income rose $1.239 billion year-over-year to $7.345 billion, while legacy operating income fell $436 million to $523 million, yielding an offset ratio of 2.84 to one. This suggests that for every dollar lost in copper, AT&T is generating nearly three dollars in new revenue from fiber and wireless.
Margins also improved significantly. The Advanced Connectivity segment’s margin expanded by 350 basis points to 25.7%, reflecting operational efficiencies and higher-value service adoption. Free cash flow increased 6.8% to $4.7 billion, even as capital expenditures rose 16.3% to support network expansion.
Subscriber Growth Surpasses Expectations
The rally was fueled by a substantial subscriber surge. AT&T added 432,000 postpaid phone customers, beating consensus estimates by 27.6%. The company also recorded 646,000 net new fiber and fixed-wireless internet subscribers, underscoring strong demand for high-speed connectivity.
Cross-selling strategies are gaining traction. Approximately 42.5% of households with advanced internet services also subscribe to AT&T wireless, up from previous quarters. “The cross-selling that they’ve been building towards, it’s actually showing up in the numbers right now,” said David Wagner, head of equity at Aptus Capital Advisors, in comments to Reuters.
Revenue Miss, Earnings Beat
Despite strong subscriber metrics, total revenue of $31.6 billion fell 0.6% short of consensus estimates. However, adjusted earnings per share of $0.65 surpassed forecasts by 10.2%, and free cash flow exceeded analyst projections. The company maintained its 2026 adjusted EPS outlook of $2.25 to $2.35 and reiterated expectations for free cash flow above $18 billion. AT&T also increased its planned share buybacks to approximately $10 billion.
CEO John Stankey emphasized the company’s competitive edge, stating: “Where we have fiber, we win with fiber and wireless.”
Peer Comparisons and Market Context
Verizon Communications Inc. (NYSE:VZ) reported 184,000 postpaid phone subscriber additions, beating forecasts of 103,900 but still less than half of AT&T’s gains. Verizon also raised its full-year adjusted earnings outlook. T-Mobile US Inc. (NASDAQ:TMUS) added 277,000 new postpaid accounts, though its third-quarter forecast of 250,000 additions fell short of the 304,000 consensus.
AT&T’s implied yield stood at 4.6% before Monday’s trading, as investors eye the Federal Reserve’s July 28-29 meeting. Advance GDP figures and June personal-income data are due Thursday.
Risks and Outlook
While the rally has shifted expectations higher, risks remain. Net debt stood at $126.4 billion as of June 30, and capital expenditures grew faster than free cash flow. Management has flagged short-term pressure on fiber revenue per user. The key question for the second half is whether the 2.84-to-one replacement rate can be sustained.
The company’s common-share dividend is scheduled for payment on August 3.
