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Will AT&T Stock Benefit From its Fiber Network Expansion Initiative?

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AT&T, Inc. (T - Free Report) recently signed a multi-year purchase agreement with Corning Incorporated (GLW - Free Report) . Per the deal, AT&T will leverage Corning’s industry-leading fiber, cable and connectivity solutions to accelerate fiber network expansion and deliver high-speed reliable Internet across the country. In addition, AT&T is also driving its network expansion initiatives through other channels, including a joint venture with BlackRock called Gigapower.

The company recently marked broadband subscriber growth for the fifth consecutive quarter, passing 28.3 million consumer and business locations. Through the recent initiatives, it aims to further build on this momentum, with a target of reaching 30 million locations by the end of 2025.

Under the current agreement with Corning, AT&T will gain access to its most advanced connectivity solution, the Evolv FlexNAP with Multifiber Pushlok Technology. This technology’s advanced features reduce dependence on skilled labor, lower the cost per deployment and ensure up to 50% reduction in carbon footprint by minimizing duct material usage. The Multi Fiber Push Lok Technology is the latest innovation in Corning's Evolv product suite. This technology is designed to streamline and expedite deployments while ensuring cost savings and sustainability.

Will This Venture Drive AT&T’s Share Performance?

Telecommunication companies have been witnessing a slowdown in the highly competitive and saturated U.S. wireless market. In this backdrop, companies like AT&T have been putting more focus on gaining a market share in the high-speed internet sector. The sector has been traditionally dominated by broadband enterprises such as Comcast.

With the growing usage of high bandwidth applications across several sectors, including education, healthcare and financial services, reliable fiber networks have become a vital infrastructure for modern society. The need for high-speed and consistent connectivity for both individuals and businesses is expected to rise at a substantial rate in upcoming years. The deal with Corning, valued approximately at $1 billion, will facilitate efficient network expansion and strengthen AT&T's position in the broadband space. This bodes well for long-term growth.

T’s Stock Price Movement

Shares of AT&T have gained 44.9% in the past year compared with the industry’s growth of 42.4%.

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T’s Zacks Rank and Key Picks

AT&T currently carries a Zacks Rank #3 (Hold).

Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last reported quarter, it delivered an earnings surprise of 8.25%. ANET is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.

Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.

UI’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.


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