Key Takeaways:
Bernstein cut price targets across five telecom and cable stocks Monday, citing SpaceX's Starlink as a growing competitive threat to traditional broadband.
"This is a Bernstein piece today. Cuts price target, T-Mobile, AT&T, Verizon, Comcast, Charter all because of Space Exploration," Jim Cramer said on his CNBC Mad Dash segment, warning viewers away from the group.
The research note hit AT&T Inc., Verizon Communications Inc., T-Mobile US Inc., Comcast Corp., and Charter Communications Inc., with the firm arguing that satellite broadband from Elon Musk's SpaceX could reshape the competitive landscape. AT&T shares have fallen 19.91% over the past year to a market cap of about $149.1 billion, while Charter has dropped 67.45%.
The central debate is whether Starlink can expand beyond rural areas into the suburbs, where cable and fiber incumbents dominate. Longtime telecom analyst Craig Moffett argues physics prevents Starlink from meaningfully penetrating suburban markets, which would confine the threat to rural geographies and protect cable operators. Bernstein cut targets anyway, and Cramer's takeaway was blunt: "I don't want to own AT&T or Verizon."
AT&T reported Q1 2026 adjusted earnings of 57 cents a share on revenue of $31.51 billion, with 584,000 internet net adds and advanced home internet revenue up 27.3% to $2.80 billion after closing the Lumen Mass Markets fiber deal. CEO John Stankey called it "our best first quarter ever for Advanced Connectivity internet customer net additions." Despite the operational momentum, the stock has been weighed down by the Starlink narrative.
Verizon, under new Chief Executive Officer Dan Schulman, delivered its first positive Q1 postpaid phone net adds since 2013. The closed acquisition of Frontier Communications pushed fiber connections up 41.9% year over year to roughly 10.8 million. Shares are down 8.78% over the past month but remain up 8.61% year to date.
Charter is the most exposed name in the group. Internet customer losses accelerated to 120,000 in Q1 2026 from 59,000 a year earlier, and earnings of $9.17 a share missed the $10.08 consensus. The company carries roughly $94.3 billion in principal debt while spending toward a 2027 network evolution completion.
T-Mobile occupies an unusual position. The company already partners with SpaceX on direct-to-cell service, which implies Starlink may not be a pure competitive threat. Shares are down 16.23% over the past year but rallied 5.68% last week, closing at $188.41. Analysts still carry a target price of $254.85, with 9 Strong Buys, 15 Buys, and no Sells.
Comcast shares have fallen 21.24% over the past year. Domestic broadband losses narrowed to 65,000 in Q1 2026 from 183,000 a year earlier, and wireless lines reached 9.7 million, with wireless revenue up 15%. Morgan Stanley recently initiated coverage at Equal Weight, calling broadband competition a "structural overhang."
The warning from a high-profile market commentator backed by a major research house could amplify selling pressure on telecom stocks already underperforming the broader market. Q2 earnings reports from AT&T and Verizon in late July will test whether operational execution can outrun the satellite narrative.
This article is for informational purposes only and does not constitute investment advice.
