SpaceX's expanding ambitions in the wireless industry provided a boost to cell tower companies on Friday as investors weighed the prospect of a new major customer for their infrastructure.
American Tower stock rose 6.7%, while SBA Communications added 7.4%. Crown Castle jumped 10.2%. Crown Castle has risen 15% this week, pacing toward the stock's best weekly performance since March 2009, according to Dow Jones Market Data. American Tower's performance put it on track for its largest single-day percentage increase since October 2023.
SpaceX said Thursday it reached an agreement to acquire wireless spectrum from Grain Management, a move the company said addresses a technical gap that will "pave the way for Starlink Mobile to become a major mobile carrier in the U.S."
The development offers a potential sign of relief for traditional tower operators, which have faced pressure from elevated interest rates. Higher borrowing costs have weighed on infrastructure valuations and threatened to slow growth, Mizuho analysts said in a note Friday.
Mizuho identified American Tower, among other real estate investment trusts, like Prologis, Ventas, and Federal Realty Investment Trust, as stocks that have been oversold and could offer attractive investing opportunities.
Shares of Ventas rose 0.3%, Prologis fell 0.5%, and Federal Realty was flat.
SpaceX's push into wireless service could create new opportunities for tower operators like American Tower, Crown Castle, and SBA Communications, Morgan Stanley analysts said in a note. While SpaceX is expected to rely heavily on its existing infrastructure and smaller wireless installations, analysts said the company likely would need traditional cell towers to build a competitive mobile network.
Morgan Stanley analysts said the expansion could make the wireless spectrum owned by other companies more valuable. Spectrum owners like EchoStar, Viasat, and Sirius XM could benefit from the emergence of another aggressive buyer on the market.
EchoStar rose 1.8%, Viasat jumped 9%, and Sirius XM added 2.5%.