AT&T raises 2026 profit outlook on fiber growth despite stock drop

AT&T (T) closed at $21.91 on Wednesday, October 21, down 6.45%, after the company announced record internet net additions and raised its 2026 profit outlook. The U.S. telecom carrier reported adjusted earnings per share and revenue that exceeded estimates, yet the stock declined as investors weighed higher spending needs against the reported growth. Trading volume reached 82.7 million shares, significantly above the three-month average of 45.9 million shares.

The company credited the performance to the strength of its fiber offerings, stating that capital investments in this area are paying off. AT&T reported more than one million advanced connectivity customer additions for a second straight quarter. The firm kept its free-cash-flow targets intact while increasing its profit forecast for 2026.

Market participants focused on the growing competitive threat from SpaceX, an Elon Musk-led company that forged a nationwide low-band spectrum deal with Grain Management. This agreement marks a major step toward SpaceX offering direct-to-device phone coverage across the United States. In the broader integrated telecommunications services sector, peers tracked AT&T's post-earnings pressure, with Verizon Communications closing at $43.56, down 2.20%, and T-Mobile U.S. finishing at $153.75, down 2.54%.

Separately from the earnings release, AT&T agreed on October 13 to sell its Mexico wireless unit for $2 billion in cash. The company filed an 8-K earlier in the month to formalize the deal, which sharpens its U.S. focus and potentially alters its capital-allocation story. While the S&P 500 rose 0.59% to 7,758 and the Nasdaq Composite gained 1.05% to 26,703 on the day, AT&T's stock moved in the opposite direction amid these developments.