The recent selloff in telecommunication stocks may be overdone, with several analysts saying the competitive risks posed by SpaceX's Starlink aren't imminent.

Starlink is a high-speed satellite internet service that uses low Earth orbit satellites to bring connectivity to its customers. Starlink has been used mostly in rural areas, but Wall Street expects its connectivity to expand and potentially compete further with the big three telecom companies: Verizon Communications, AT&T, and T-Mobile US.

These concerns were amplified last week after Bloomberg reported that Charter Communications has held high-level discussions with SpaceX about potentially partnering on a consumer mobile phone in the U.S.

SpaceX stock gained 7.2% on June 29 following that report.

AT&T stock is down 18% this year while T-Mobile stock has dropped 11%. Verizon shares have risen 3.9% this year but are still down 19% from their 52-week closing high of $51.38 on March 13, 2026.

KeyBanc Capital Markets analyst Brandon Nispel is still optimistic about the near-term future of the telecom space despite these concerns.

"Starlink sentiment overhang on the sector feels overdone relative to the lack of NT [near-term] fundamental impact, which we think sets up for a relief rally on strong earnings and guidance," Nispel wrote in a note on Sunday.

BofA Securities analyst Michael Funk agrees, specifically when it comes to the impact low Earth orbit satellite companies could have on T-Mobile's business.

"T-Mobile is least exposed to the competitive threat posed by LEO providers, in our view," Funk wrote on Monday. "T-Mobile wireless has 50% share of households in urban markets such as LA and NYC and only 24% share in rural markets. LEO direct-to-device (D2D) service has been concentrated in rural and underserved environments and may face propagation and capacity limits in more urban environments."

Funk upgraded shares of T-Mobile to Buy from Neutral on Monday while maintaining a $220 price target.

Still, long-term disruption risks to the space remain, especially as SpaceX is getting ready to launch its V3 satellites, which are expected to deliver improved internet connectivity compared with previous versions.

"Starlink's broadband opportunity is already credible and represents a clear substitute for cable and fixed wireless access. In contrast, Starlink's mobile strategy is undefined, but the market seems convinced that where there is a will and an ability to pay the bill, there is a way," Wolfe Research analyst Peter Supino wrote on July 1.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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July 06, 2026 13:12 ET (17:12 GMT)

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