AT&T (T) shares fell sharply after Oppenheimer downgraded the telecom giant, warning that SpaceX’s growing ambitions pose a lasting threat to its business.
Oppenheimer analyst Timothy Horan cut his rating on AT&T to Perform from Outperform, also lowering his price target on the stock amid rising competitive concerns.
Horan said the long-term outlook for AT&T’s core businesses is increasingly uncertain, stating “We think longer-term broadband subscriber growth and eventually mobile is at risk.”
The downgrade followed SpaceX’s announcement of an $8 billion deal to acquire a nationwide portfolio of wireless spectrum from Grain Management.
SpaceX intends to use the newly acquired spectrum to strengthen its Starlink Mobile service and expand mobile connectivity coverage across the United States.
The acquisition signals that SpaceX is prepared to become an aggressive and sustained buyer of wireless spectrum, according to analysts at Morgan Stanley.
Morgan Stanley noted that any competitive threat to established carriers like AT&T will most likely materialize first in rural markets before spreading toward densely populated urban centers.
Bernstein analyst Madison Rezaei cautioned that building a full nationwide terrestrial network would still cost SpaceX somewhere between $50 billion and $130 billion across tens of thousands of cell sites.
Rezaei acknowledged, however, that low-band spectrum lowers the cost of constructing an independent network, making SpaceX’s longer-term ambitions more financially plausible than they once appeared.
Low-band spectrum carries a distinct physical advantage, traveling much farther and penetrating buildings more effectively than higher-frequency alternatives that rival carriers rely on.
AT&T CEO John Stankey has pushed back on the narrative that satellite technology threatens to displace the company’s primary network infrastructure.
Stankey has publicly described satellite connectivity as “a great complement” to what AT&T already provides rather than a direct substitute for its services.
Despite that reassurance, AT&T’s stock decline led a broader sell-off across telecom shares as investors weighed the longer-term implications of SpaceX’s spectrum strategy.
The Grain Management deal marks a significant escalation in SpaceX’s effort to position Starlink as a genuine competitor in the U.S. mobile market, not just a rural broadband alternative.
