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T Rides on Strength in Advanced Connectivity Segment: Will it Sustain?
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Key Takeaways
T's Advanced Connectivity revenues rose 4.1% year over year to $28.62 billion in the second quarter.
T added more than 1 million fiber locations in Q2, bringing its total to 38.6 million.
T's convergence strategy is gaining traction, while AI-driven demand could support long-term growth.
AT&T, Inc. (T - Free Report) is benefiting from solid traction in the Advanced Connectivity segment. The segment revenues rose 4.1% year over year to $28.62 billion. There are multiple growth drivers in this segment. Fiber is one of the largest growth drivers. The company added more than 1 million fiber locations in the second quarter. The total number of fiber locations has now reached 38.6 million. T remains on track to exceed 40 million by year-end 2026 and 60 million by 2030.
Growth in converged fiber and wireless customers is another catalyst. In the second quarter, 42.5% of advanced home Internet households had an AT&T postpaid wireless account. The convergence strategy is gaining strong traction, helping AT&T retain customers and deepen relationships. By combining wireless and home Internet services, the company is creating more cross-selling opportunities and increasing customer lifetime value.
Internet subscriber growth remains a major contributor to segment revenues. AT&T generated 646,000 Internet net adds, consisting of 367,000 fiber and 279,000 fixed wireless additions.
The company is witnessing solid traction in the wireless vertical as well. AT&T added 432,000 postpaid phone subscribers in the second quarter. An increase in retail wireless subscribers, particularly in underpenetrated categories and the rising number of converged customers are propelling this growth.
Artificial intelligence (AI)-driven demand for advanced connectivity is an emerging growth driver. The expansion of AI workloads is expected to increase demand for faster, higher-capacity and lower-latency networks. As AI processing moves closer to end users, demand for fiber-enabled networks will further increase. This will likely be a long-term growth driver for the Advanced Connectivity segment.
How Are Competitors Faring?
The company faces stiff competition from Verizon Communications, Inc. (VZ - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) in the telecom market. In the second quarter of 2026, Verizon’s Mobility and broadband service revenues increased 2.8% year over year to approximately $23.4 billion. Verizon continues to broaden its addressable market through fiber expansion and broadband growth, while strengthening convergence opportunities. In second-quarter 2026, the company added 348,000 broadband subscribers, including continued contributions from fixed wireless access and fiber, increasing total fixed wireless access and fiber broadband connections to approximately 17.1 million.
T-Mobile continues to benefit from healthy demand trends across wireless and broadband services. In the second quarter 2026, the company added 277,000 postpaid net accounts while postpaid ARPA increased 2% to $152.91. Service revenues increased 9% year over year, supported by premium plans, business wireless and broadband adoption.
T’s Price Performance, Valuation & Estimates
AT&T shares have lost 14.6% over the past year against the industry’s 80% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, AT&T trades at a forward price-to-sales ratio of 1.31, below the industry average of 8.04.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased 1.3% to $2.35 over the past 60 days, while the same for 2027 have increased 1.2% to $2.57.
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T Rides on Strength in Advanced Connectivity Segment: Will it Sustain?
Key Takeaways
AT&T, Inc. (T - Free Report) is benefiting from solid traction in the Advanced Connectivity segment. The segment revenues rose 4.1% year over year to $28.62 billion. There are multiple growth drivers in this segment. Fiber is one of the largest growth drivers. The company added more than 1 million fiber locations in the second quarter. The total number of fiber locations has now reached 38.6 million. T remains on track to exceed 40 million by year-end 2026 and 60 million by 2030.
Growth in converged fiber and wireless customers is another catalyst. In the second quarter, 42.5% of advanced home Internet households had an AT&T postpaid wireless account. The convergence strategy is gaining strong traction, helping AT&T retain customers and deepen relationships. By combining wireless and home Internet services, the company is creating more cross-selling opportunities and increasing customer lifetime value.
Internet subscriber growth remains a major contributor to segment revenues. AT&T generated 646,000 Internet net adds, consisting of 367,000 fiber and 279,000 fixed wireless additions.
The company is witnessing solid traction in the wireless vertical as well. AT&T added 432,000 postpaid phone subscribers in the second quarter. An increase in retail wireless subscribers, particularly in underpenetrated categories and the rising number of converged customers are propelling this growth.
Artificial intelligence (AI)-driven demand for advanced connectivity is an emerging growth driver. The expansion of AI workloads is expected to increase demand for faster, higher-capacity and lower-latency networks. As AI processing moves closer to end users, demand for fiber-enabled networks will further increase. This will likely be a long-term growth driver for the Advanced Connectivity segment.
How Are Competitors Faring?
The company faces stiff competition from Verizon Communications, Inc. (VZ - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) in the telecom market. In the second quarter of 2026, Verizon’s Mobility and broadband service revenues increased 2.8% year over year to approximately $23.4 billion. Verizon continues to broaden its addressable market through fiber expansion and broadband growth, while strengthening convergence opportunities. In second-quarter 2026, the company added 348,000 broadband subscribers, including continued contributions from fixed wireless access and fiber, increasing total fixed wireless access and fiber broadband connections to approximately 17.1 million.
T-Mobile continues to benefit from healthy demand trends across wireless and broadband services. In the second quarter 2026, the company added 277,000 postpaid net accounts while postpaid ARPA increased 2% to $152.91. Service revenues increased 9% year over year, supported by premium plans, business wireless and broadband adoption.
T’s Price Performance, Valuation & Estimates
AT&T shares have lost 14.6% over the past year against the industry’s 80% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, AT&T trades at a forward price-to-sales ratio of 1.31, below the industry average of 8.04.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased 1.3% to $2.35 over the past 60 days, while the same for 2027 have increased 1.2% to $2.57.
Image Source: Zacks Investment Research
AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.