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AT&T vs AST SpaceMobile: Which Connectivity Stock Should You Bet On?
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Key Takeaways
T is expanding its fiber network while strengthening customer retention through bundled services.
ASTS is advancing BlueBird satellite deployment to scale direct-to-device broadband coverage.
AT&T and major telecom carriers are exploring a joint platform to reduce wireless coverage gaps.
AT&T, Inc. (T - Free Report) and AST SpaceMobile (ASTS - Free Report) are both part of the broader global connectivity sector, but they operate in different areas of the ecosystem.
ASTS is developing satellite-based connectivity through low Earth orbit satellites that can directly connect with standard mobile phones, helping extend coverage to remote and underserved regions where terrestrial network infrastructure is unavailable. AT&T is the second-largest wireless service provider in North America and one of the world’s leading communications service carriers. It offers wireless and broadband services through fiber network and cellular towers.
Rapidly rising global data consumption, fueled by 5G adoption, cloud computing, artificial intelligence, video streaming and the growing IoT ecosystem, is a driving factor of the connectivity sector. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in this broader sector.
The Case for T
AT&T is benefiting from momentum in its fiber business. The company has now crossed 37 million fiber locations and aims to exceed 60 million by 2030 across the United States. The rapid expansion strategy is helping AT&T attract more customers. The company reported 584,000 advanced internet net additions during the quarter, backed by strong contributions from both fiber and fixed wireless services.
Rise in customer convergence is another positive factor for AT&T. Around 42% of AT&T’s advanced home internet users also subscribe to its wireless services. Management has stated that this is approaching 45% on an organic basis. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. From a user’s point of view, opting for fiber and wireless services from a single vendor reduces complexity for them as well. This trend improves customer retention, lowers churn and increases long-term customer value.
However, the company operates in a highly saturated and competitive U.S. telecom market, and stiff competition with a relatively fixed pool of customers strains the margin. The company faces competition from other industry leaders such as Verizon Communications, Inc. (VZ - Free Report) , T-Mobile, US, Inc. (TMUS - Free Report) and Comcast. Both T-Mobile and Verizon boast comprehensive network coverage across the country. Verizon is also rapidly expanding into the fiber market and offering bundled solutions to drive user retention.
Amid growing competition, the company is expanding beyond traditional telecom services. The collaboration with Lexus to integrate AT&T 5G connectivity into vehicles boosts prospects in the in-car connectivity space. AT&T recently announced a joint venture with long-term telecom rivals Verizon and T-Mobile. Instead of competing separately in satellite-enabled mobile coverage, the three carriers are planning to pool spectrum resources and work collaboratively. The goal is to build a unified platform aimed at reducing wireless dead zones across the United States, particularly in rural and underserved areas. However, it is to be noted that the discussion is in the primary stage and not finalized yet.
During the quarter, revenues increased 2.9% year over year to $31.5 billion, while adjusted EPS climbed 11.8% to 57 cents. Advanced Connectivity EBITDA rose 5.6%, showing improving profitability in the company’s core growth segment. This is a solid performance in a highly competitive industry, and AT&T has reaffirmed its long-term guidance, including expectations for higher free cash flow, EBITDA growth and shareholder returns through 2028.
The Case for ASTS
ASTS is positioning itself as one of the major players in the emerging satellite connectivity space. The company is targeting approximately 45 BlueBird satellites in orbit during 2026. Management stated that BlueBird 11 through BlueBird 33 are already in advanced stages of production and assembly, while phased arrays are completed through BlueBird 28. These factors indicate ASTS is rapidly scaling up the satellite deployment and manufacturing process.
ASTS’ growing prowess in the direct-to-device broadband capability is evident from its recent achievements. The company recently achieved download speeds of 98.9 Mbps directly to unmodified smartphones over international waters using its in-orbit Block 1 BlueBird satellites. Moreover, the company expects newer Block 2 BlueBird satellites to nearly double these speeds. However, it is to be noted that although ASTS has demonstrated technology success, large-scale consumer adoption, pricing models, carrier monetization and long-term economics are still unproven.
The partnership ecosystem is another major positive. ASTS now has nearly 60 mobile network operator partners globally covering more than 3 billion subscribers. Major telecom partners include AT&T, Verizon, Vodafone, Rakuten, Bell Canada and Telus.
However, the execution risks of ASTS’s massive and technologically intricate project remain a major concern for investors. Recently, its BlueBird 7 was placed into a lower-than-planned orbit during the New Glenn 3 mission. Although the satellite successfully separated from the launch vehicle and powered on, the company stated that the altitude was insufficient to sustain operations, and the satellite is expected to de-orbit. ASTS expects the cost of the satellite to be recovered through insurance and continues to target approximately 45 satellites in orbit by the end of 2026.
How Do Zacks Estimates Compare for T & ASTS?
The Zacks Consensus Estimate for AT&T’s 2026 sales implies year-over-year growth of 2.98%, while that for EPS suggests growth of 8.49%. The EPS estimates have been trending northward (up 1.32%) over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AST SpaceMobile’s 2026 sales implies year-over-year growth of 132.32%, while that for EPS suggests a decline of 9.7%. The EPS estimates have been trending southward (down 47%) over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of T & ASTS
Over the past year, AT&T has declined 11.1% compared with the industry’s decline of 13%. AST SpaceMobile has gained 211.3% over the same period.
Image Source: Zacks Investment Research
AT&T looks more attractive than AST SpaceMobile from a valuation standpoint. Going by the price/sales ratio, ASTS’ shares currently trade at 82.18 forward sales, significantly higher than 1.31 for AT&T.
Both AT&T and AST SpaceMobile expect sales to improve in 2026. ASTS has delivered stronger stock price performance, while T appears more attractive from a valuation standpoint. T’s upward estimate revision trend shows growing investors’ confidence. On the other hand, ASTS is witnessing a downtrend in estimate revision. Despite its technological progress, ASTS still faces uncertainty around large-scale adoption, monetization and long-term commercial viability. T benefits from its strong telecom infrastructure footprint, stable cash flow generation and consistent dividend payments to shareholders, which remain key positives for the stock. Owing to these factors, T appears to be a better investment option at the moment.
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AT&T vs AST SpaceMobile: Which Connectivity Stock Should You Bet On?
Key Takeaways
AT&T, Inc. (T - Free Report) and AST SpaceMobile (ASTS - Free Report) are both part of the broader global connectivity sector, but they operate in different areas of the ecosystem.
ASTS is developing satellite-based connectivity through low Earth orbit satellites that can directly connect with standard mobile phones, helping extend coverage to remote and underserved regions where terrestrial network infrastructure is unavailable. AT&T is the second-largest wireless service provider in North America and one of the world’s leading communications service carriers. It offers wireless and broadband services through fiber network and cellular towers.
Rapidly rising global data consumption, fueled by 5G adoption, cloud computing, artificial intelligence, video streaming and the growing IoT ecosystem, is a driving factor of the connectivity sector. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in this broader sector.
The Case for T
AT&T is benefiting from momentum in its fiber business. The company has now crossed 37 million fiber locations and aims to exceed 60 million by 2030 across the United States. The rapid expansion strategy is helping AT&T attract more customers. The company reported 584,000 advanced internet net additions during the quarter, backed by strong contributions from both fiber and fixed wireless services.
Rise in customer convergence is another positive factor for AT&T. Around 42% of AT&T’s advanced home internet users also subscribe to its wireless services. Management has stated that this is approaching 45% on an organic basis. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. From a user’s point of view, opting for fiber and wireless services from a single vendor reduces complexity for them as well. This trend improves customer retention, lowers churn and increases long-term customer value.
However, the company operates in a highly saturated and competitive U.S. telecom market, and stiff competition with a relatively fixed pool of customers strains the margin. The company faces competition from other industry leaders such as Verizon Communications, Inc. (VZ - Free Report) , T-Mobile, US, Inc. (TMUS - Free Report) and Comcast. Both T-Mobile and Verizon boast comprehensive network coverage across the country. Verizon is also rapidly expanding into the fiber market and offering bundled solutions to drive user retention.
Amid growing competition, the company is expanding beyond traditional telecom services. The collaboration with Lexus to integrate AT&T 5G connectivity into vehicles boosts prospects in the in-car connectivity space. AT&T recently announced a joint venture with long-term telecom rivals Verizon and T-Mobile. Instead of competing separately in satellite-enabled mobile coverage, the three carriers are planning to pool spectrum resources and work collaboratively. The goal is to build a unified platform aimed at reducing wireless dead zones across the United States, particularly in rural and underserved areas. However, it is to be noted that the discussion is in the primary stage and not finalized yet.
During the quarter, revenues increased 2.9% year over year to $31.5 billion, while adjusted EPS climbed 11.8% to 57 cents. Advanced Connectivity EBITDA rose 5.6%, showing improving profitability in the company’s core growth segment. This is a solid performance in a highly competitive industry, and AT&T has reaffirmed its long-term guidance, including expectations for higher free cash flow, EBITDA growth and shareholder returns through 2028.
The Case for ASTS
ASTS is positioning itself as one of the major players in the emerging satellite connectivity space. The company is targeting approximately 45 BlueBird satellites in orbit during 2026. Management stated that BlueBird 11 through BlueBird 33 are already in advanced stages of production and assembly, while phased arrays are completed through BlueBird 28. These factors indicate ASTS is rapidly scaling up the satellite deployment and manufacturing process.
ASTS’ growing prowess in the direct-to-device broadband capability is evident from its recent achievements. The company recently achieved download speeds of 98.9 Mbps directly to unmodified smartphones over international waters using its in-orbit Block 1 BlueBird satellites. Moreover, the company expects newer Block 2 BlueBird satellites to nearly double these speeds. However, it is to be noted that although ASTS has demonstrated technology success, large-scale consumer adoption, pricing models, carrier monetization and long-term economics are still unproven.
The partnership ecosystem is another major positive. ASTS now has nearly 60 mobile network operator partners globally covering more than 3 billion subscribers. Major telecom partners include AT&T, Verizon, Vodafone, Rakuten, Bell Canada and Telus.
However, the execution risks of ASTS’s massive and technologically intricate project remain a major concern for investors. Recently, its BlueBird 7 was placed into a lower-than-planned orbit during the New Glenn 3 mission. Although the satellite successfully separated from the launch vehicle and powered on, the company stated that the altitude was insufficient to sustain operations, and the satellite is expected to de-orbit. ASTS expects the cost of the satellite to be recovered through insurance and continues to target approximately 45 satellites in orbit by the end of 2026.
How Do Zacks Estimates Compare for T & ASTS?
The Zacks Consensus Estimate for AT&T’s 2026 sales implies year-over-year growth of 2.98%, while that for EPS suggests growth of 8.49%. The EPS estimates have been trending northward (up 1.32%) over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AST SpaceMobile’s 2026 sales implies year-over-year growth of 132.32%, while that for EPS suggests a decline of 9.7%. The EPS estimates have been trending southward (down 47%) over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of T & ASTS
Over the past year, AT&T has declined 11.1% compared with the industry’s decline of 13%. AST SpaceMobile has gained 211.3% over the same period.
Image Source: Zacks Investment Research
AT&T looks more attractive than AST SpaceMobile from a valuation standpoint. Going by the price/sales ratio, ASTS’ shares currently trade at 82.18 forward sales, significantly higher than 1.31 for AT&T.
Image Source: Zacks Investment Research
AT&T or AST SpaceMobile: Which is a Better Pick?
AT&T and ASTS carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both AT&T and AST SpaceMobile expect sales to improve in 2026. ASTS has delivered stronger stock price performance, while T appears more attractive from a valuation standpoint. T’s upward estimate revision trend shows growing investors’ confidence. On the other hand, ASTS is witnessing a downtrend in estimate revision. Despite its technological progress, ASTS still faces uncertainty around large-scale adoption, monetization and long-term commercial viability. T benefits from its strong telecom infrastructure footprint, stable cash flow generation and consistent dividend payments to shareholders, which remain key positives for the stock. Owing to these factors, T appears to be a better investment option at the moment.