MW AT&T's stock is seeing its worst day in 8 months as the SpaceX threat comes into focus

By Emily Bary and William Gavin

Investors aren't thinking enough about the risk posed by SpaceX's satellite ambitions, Oppenheimer analyst warns

AT&T has more broadband exposure than its telecommunications peers.

Are investors in traditional telecommunications stocks worrying enough about the threat posed by SpaceX and other companies that are growing their satellite ambitions?

When it comes to AT&T $(T)$, investors may be "underestimating" the disruption potential brought by low-Earth-orbit satellite offerings in the broadband market, according to Oppenheimer's Timothy Horan.

"Pricing for services like Starlink is now on par with legacy broadbandbut will decline rapidly with V3 Satellites having 10x the capacity," he wrote.

Horan downgraded AT&T's stock to perform from outperform on Wednesday. Shares are down 4.4% in midday action and on pace for their worst one-day performance since Oct. 6, 2025, according to Dow Jones Market Data.

"SpaceX will disrupt the $1.6 [trillion] communications industry, in our view," Horan wrote in a separate note. For SpaceX, "the only major revenue to capture immediately" lies within the communications market.

SpaceX's connectivity business - Starlink and related offerings - generated nearly $11.4 billion of revenue in 2025, a roughly 50% increase from a year earlier. For comparison, the firm's space and artificial-intelligence divisions, combined, generated almost $7.3 billion in 2025.

Most of the connectivity division's revenue growth came from a 99.9% increase in Starlink subscribers, which was somewhat offset by a decline in subscriber average revenue per user. As of March 31, SpaceX had some 10.3 million subscribers across 164 countries, territories and other markets.

"By clearly demonstrating Starlink's superior speed, low-latency, and ease of installation, we expect to drive meaningful subscriber growth," SpaceX said in its initial public offering paperwork.

The broadband market has already been experiencing upheaval as wireless companies - AT&T included - push fixed wireless access, or FWA, a technology that uses spare mobile capacity to provide customers with home internet service. This has been a source of pressure on traditional broadband providers, notably cable companies like Comcast $(CMCSA)$ and Charter Communications $(CHTR)$.

"We were early in articulating the risk to legacy broadband providers from FWA, which the industry underestimated, as they are doing with satellite now," Horan wrote. He noted that AT&T has more broadband exposure than its main telecommunications rivals, though not as much as legacy cable operators.

T-Mobile US $(TMUS)$ Chief Financial Officer Peter Osvaldik, for his part, downplayed the threat posed by SpaceX's Starlink business in comments at an Evercore conference on Tuesday.

"There's no effective way for them to compete with a terrestrial network," he said. "And they're not limited by money or number of satellites. They're limited by the laws of physics."

Horan wrote that he thinks SpaceX will "ultimately build its own terrestrial network with an integrated antenna/cell site hardware with satellite backhaul." He posited that the company may opt to outright purchase a carrier or a mobile virtual network operator, or MVNO, which is a provider with an arrangement to leverage another company's capacity.

AT&T, T-Mobile and Verizon Communications $(VZ)$ last month agreed to form a joint venture that eases the process of offering satellite services to mobile subscribers. The arrangement "should reduce investor fears about SpaceX getting an MVNO from any of the carriers," BNP Paribas analyst Sam McHugh wrote at the time.

"On the other hand, the carriers coming together (implicitly) to reduce SpaceX's potential influence in the direct-to-cell space may suggest that they were more nervous than the market realized," he added.

-Emily Bary -William Gavin

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June 03, 2026 13:36 ET (17:36 GMT)

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