AT&T Inc. T is trying to turn connectivity demand into a more durable growth model. Its strategy now leans on fiber, 5G and business network services rather than old media and video assets.
Execution matters. Fiber reach, wireless scale and edge demand can support revenues and margins, while capital intensity and competition remain checks.
AT&T Rides the Fiber Convergence Trend
Fiber is central to AT&T because it supports more than stand-alone broadband additions. In the second quarter of 2026, the company recorded more than 1 million advanced connectivity net additions, including 646,000 Internet net additions and 432,000 postpaid phone net additions.
AT&T added 367,000 fiber customers in the quarter, while advanced home Internet connections rose 29.5% year over year. The convergence rate reached 42.5%, meaning a growing share of those Internet customers also had an AT&T postpaid wireless plan.
That mix matters because management indicated that converged households churn at roughly half the rate of stand-alone accounts and carry a high-single-digit average revenue per account uplift. AT&T ended the quarter with 38.6 million consumer and business fiber locations reached.
T Uses 5G to Broaden Internet Reach
AT&T’s 5G strategy supports the fiber push rather than replacing it. The company uses millimeter-wave spectrum in dense areas and mid- and low-band holdings elsewhere to balance capacity and coverage.
Management has tied fiber and 5G together in a converged network that reaches more than 90 million customer locations with advanced Internet services over either fiber or 5G. Fixed wireless is one sign of that broader reach, with AT&T adding 279,000 fixed wireless customers in the second quarter.
T-Mobile US, Inc. TMUS remains a relevant benchmark in wireless and home broadband competition. Its presence keeps pressure on carriers to pair network quality with attractive customer offers.
AT&T Pushes Toward AI-Ready Networks
AT&T’s edge and artificial intelligence-related network strategy is an emerging growth angle, not an immediate earnings reset. Management expects AI-ready connectivity needs to grow as users require lower latency, stronger uplink capacity and reliable traffic management.
The building blocks are dense fiber, 5G backhaul, spectrum depth, mobile edge computing zones and private 5G deployments. AT&T has cited more than 20 metro mobile edge computing zones live and more than 150 active private 5G and edge trials.
The planned EchoStar 600 MHz spectrum acquisition is intended to strengthen low-band uplink capacity. That could become more useful if AI workloads gradually lift backbone traffic and demand more reliable two-way network performance.
T Seeks Efficiency Through Open RAN
Growth alone is not enough for AT&T’s investment case. The company also needs to run its network more efficiently as fiber, spectrum and 5G spending remain high.
Open radio access network, or Open RAN, is part of that effort. AT&T plans to use Ericsson technology to deploy a commercial-scale Open RAN buildout and aims to move 70% of wireless network traffic across open-capable platforms by late 2026.
The broader transformation plan includes vendor rationalization, artificial intelligence enablement, digitalization and lower legacy operating support costs. Management is targeting $4 billion in annual cost savings by the end of 2028. Verizon Communications Inc. VZ offers another large-scale network comparison for investors focused on network cost discipline.
How AT&T’s Ratings Frame the Trend Trade
AT&T offers exposure to several important connectivity trends, but the stock is not a clean growth call. Fiber convergence, fixed wireless adoption, edge workloads and Open RAN efficiency give the company a credible roadmap, while legacy declines and promotional wireless competition still limit improvement.
The stock currently carries a Zacks Rank #3 (Hold). Its Value Score of A points to a favorable valuation profile, but the Growth Score of D and Momentum Score of F show weaker signals on earnings growth characteristics and near-term price trend.
The VGM Score of C places the combined style picture in the middle. Investors may see value in T’s connectivity exposure and income profile, but the market is still waiting for stronger growth and momentum signals.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AT&T Inc. (T): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).