AT&T faces rating cut as Bernstein flags SpaceX wireless threat

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AT&T rating cut over SpaceX threat

Highlights

AT&T downgraded by Bernstein to market perform from outperform, price target cut to $24 from $25 due to SpaceX wireless competition and seasonality.
SpaceX's launch of Starlink V3 satellites after the Starship 14 mission signals substantial wireless capacity expansion, intensifying competitive pressure on U.S. telecom incumbents.
AT&T shares are down over 9% in 2026 while SpaceX stock is up 17% in the past three months post-IPO, diverging from Wall Street consensus on AT&T.

Bernstein outlines downgrade and Starlink risks

As reported by CNBC, citing Bernstein, the investment firm downgrades AT&T to market perform from outperform and cuts its price target to $24 from $25, implying about 7% upside from Monday's close.

Analyst Laurent Yoon says the change reflects ongoing pressure from SpaceX's push into broadband and wireless, adding to recent pricing moves by incumbent operators and expected fourth-quarter seasonality. He says it is becoming harder to justify an outperform rating on incumbent telecom operators, even at discounted valuations, because volatility appears likely.

Yoon says SpaceX's wireless expansion is likely to trigger a prolonged investor debate over Starlink's market impact and the possibility of more aggressive pricing. He adds that Starlink appears to have a long runway for attracting subscribers, even if the scale of disruption to established telecom providers remains open to debate.

Market implications for U.S. telecom stocks

SpaceX's wireless push gains momentum after last month's Starship 14 mission, which successfully deploys the first batch of Starlink V3 satellites. Bernstein says that launch marks the start of what is likely to be a significant capacity expansion for Starlink's wireless service.

The development reinforces the threat that newer satellite-based operators pose to traditional telecom companies as startups gain market share in wireless. Bernstein argues that trend could further erode the pricing power of established players across the U.S. sector.

Bernstein's view runs against broader Wall Street consensus. LSEG data shows 15 of the 27 analysts covering AT&T still hold a buy or strong buy rating, while AT&T shares have fallen more than 9% in 2026 and SpaceX stock has risen 17% over the past three months after the company went public earlier this year.

Our earlier coverage of SpaceX’s New York City Council appearance highlighted how the company was drawn into a legislative review of AI safety after a subpoena dispute. That article noted regulators’ focus on privacy, safeguards, and accountability tied to Grok, alongside mounting legal pressure related to alleged deepfake misuse—adding to the broader risk debate now surrounding SpaceX as it expands into new markets.

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