AT&T Inc. (NYSE: T) shares surged after the telecom giant reported second-quarter 2026 earnings that sailed past Wall Street estimates, driven by surprisingly strong wireless subscriber growth and an accelerated $10 billion share buyback program. The stock rose 3.5% to close at $23.04 on Wednesday, extending its five-day gain to 7.5%, as investors focused on the company’s improving operational momentum and capital return plans rather than lingering concerns about competition from SpaceX’s Starlink satellite internet service.
Revenue reached $31.56 billion, up 2.3% year-over-year, slightly below the $31.80 billion consensus, but adjusted earnings per share of $0.65 beat expectations of $0.59 by a wide margin, a 20.4% jump from the prior year. The bottom-line beat was fueled by a 432,000 increase in postpaid phone subscribers—well above the 338,500 analyst estimate—alongside 367,000 new fiber internet customers and 279,000 fixed wireless additions. AT&T’s strategy of bundling high-speed fiber with mobile services is paying off, with a growing share of advanced internet customers also taking wireless plans.
Free cash flow for the quarter came in at $4.7 billion, exceeding the $4.43 billion forecast, and the company reiterated its full-year free cash flow target of at least $18 billion. The cash generation supports an aggressive shareholder return program: AT&T now plans approximately $10 billion in share repurchases for 2026, having already spent $4.435 billion in the first half to buy back 174 million shares at an average price of about $25.49—above the current share price, which some investors view as an opportunity. Including dividends, total shareholder returns could approach $17.6 billion.
In a CNBC interview, CEO John Stankey pushed back firmly against fears that SpaceX’s Starlink and other low-Earth orbit satellite providers could erode AT&T’s core business. “We can compete with anybody that comes in; we’re in a very strong position with the best product out there,” he said, emphasizing that satellite networks cannot replicate the tens of billions of dollars invested in terrestrial fiber and 5G infrastructure that serves dense urban environments like hospitals, stadiums, and office towers. Stankey noted that AT&T handles more than 98% of its converged customers’ data traffic, with satellites needed only to fill rare coverage gaps off the terrestrial grid.
Dismissing the idea of a wholesale partnership with Starlink, Stankey explained that AT&T only pursues such deals when a market segment cannot be reached through its own brand and footprint—something that does not apply in its primary metropolitan and suburban markets. Instead, AT&T is part of an industry consortium with T-Mobile and Verizon that will contract across multiple satellite constellations, including SpaceX, Amazon’s Kuiper, and AST SpaceMobile, ensuring flexible, cost-effective off-grid coverage without empowering a single competitor. This approach reinforces the company’s fiber-and-wireless strategy while providing seamless backup connectivity.
Despite the upbeat tone, AT&T stock remains down over 20% from its year-to-date high, and challenges such as elevated debt levels and rising interest costs persist. However, the market’s reaction suggests that the strong subscriber metrics and the commitment to large-scale buybacks are overriding near-term headwinds. Wall Street maintains a consensus Overweight rating on the stock, with an average price target of $29 implying significant upside from current levels.
