AT&T vs. SpaceX: Which Connectivity Stock Has More Upside Now?

AT&T Inc. T and Space Exploration Technologies Corp. SPCX are two key players in the connectivity market. Operating as one of the premier wireless service providers in the United States, AT&T provides a vast array of communication and business solutions that include wireless, local exchange, long-distance, data/broadband and Internet, managed networking, fiber and cloud-based services.

Operating a fleet of about 10,200 broadband and mobile satellites, with about 9,600 broadband satellites, SpaceX's Starlink offers satellite Internet directly to consumers and business enterprises. The network served about 12 million Starlink subscribers across 167 countries and other markets. SpaceX reported a median residential download speed of 225 Mbps during peak hours. 

Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.

The Case for AT&T

With a customer-centric business model, AT&T is witnessing healthy momentum in its postpaid wireless business with a lower churn rate and increased adoption of higher-tier unlimited plans. The company remains focused on improving mobile 5G, fixed wireless and edge computing services to drive growth. AT&T is leveraging Ericsson technology to deploy a commercial-scale open radio access network (Open RAN) across the country to help build a more robust ecosystem of network infrastructure providers and suppliers. It is also collaborating with Nokia to streamline network services, improve automation, speed up deployment times and boost operational efficiency.

AT&T is benefiting from rising demand for mobile data as it continues to build a nationwide 5G network using a mix of millimeter wave spectrum in dense pockets and mid- and low-band holdings in suburban and rural areas. The company’s approach is designed to support a smoother experience across Wi-Fi, LTE and 5G, while using mid-band spectrum to balance coverage and capacity. Management has tied this strategy to a converged network footprint that reaches more than 90 million customer locations with advanced Internet services over either fiber or 5G. In 2026, the company expects low single-digit consolidated service revenue growth, supported by wireless service revenue growth of 2% to 3% and advanced home Internet revenue growth that is driven by fiber and fixed wireless customer gains. 
 
However, despite its effort to reinforce focus on the customer-centric business model with an aim to maintain its customer base, its wireline division is struggling with persistent losses in access lines as a result of competitive pressure from voice-over-Internet-protocol (VoIP) service providers and aggressive triple-play (voice, data, video) offerings by the cable companies. Its effort to woo customers with healthy discounts, freebies and cash credits further escalates margin pressures. Stiff competition from Verizon Communications Inc. VZ is a headwind.  

The Case for SPCX

SpaceX has transformed the launch industry through its reusable Falcon 9 rockets, significantly reducing launch costs and increasing mission frequency. The company now conducts more launches annually than any of its global competitors, giving it a commanding share of the commercial launch market. In addition, Starlink provides recurring subscription income and potentially higher long-term margins. The business also benefits from a powerful competitive advantage. SpaceX can launch its own satellites at a fraction of the cost of its competitors, allowing Starlink to expand its network faster and more efficiently. As global demand for reliable broadband connectivity increases, Starlink's prospects become solid.

The Elon Musk-led company is aiming to evolve into a vertically integrated artificial intelligence (AI) infrastructure company by combining advanced AI models, large-scale computing capabilities and satellite connectivity under one umbrella. The transformation is likely to unlock a significantly larger addressable market while diversifying the company's revenue base beyond launch services and Starlink. As part of the transition, xAI's flagship chatbot, Grok, has started operating under the SpaceXAI brand. The integration is expected to strengthen collaboration between the company's AI software, computing infrastructure and satellite network, creating a differentiated ecosystem that few competitors can match.

The company plans to deploy AI compute satellites as early as 2028, effectively creating space-based data centers capable of delivering large-scale computing capacity. This initiative leverages SpaceX's leadership in satellite deployment while addressing the growing demand for AI computing resources. Alongside its satellite ambitions, SpaceX continues to expand its Colossus data center platform, strengthening its position in AI infrastructure. SpaceX has also entered into a definitive agreement to acquire Anysphere in an all-stock deal valued at $60 billion. The buyout of a startup firm behind the rapidly growing AI coding assistant Cursor is primarily aimed at gaining a firmer footing in the enterprise AI market.

However, SpaceX is scaling several capital-intensive platforms simultaneously. The company is investing heavily in COLOSSUS, COLOSSUS II, Grok, enterprise offerings, compute services and future orbital AI compute. Management expects a multi-year investment cycle until sustained positive segment adjusted EBITDA is realized. The strategy may create a cost advantage if compute, energy and launch assets integrate as planned. Until then, AI adds uncertainty to margins, capital needs and consolidated earnings quality.

How Do Zacks Estimates Compare for T & SPCX?

The Zacks Consensus Estimate for AT&T’s 2026 sales and EPS implies year-over-year growth of 2.9% and 10.9%, respectively. The EPS estimate for 2026 has inched up 1.3% over the past 60 days.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for SpaceX’s 2026 sales implies year-over-year growth of 131.7%. EPS estimates have improved 37.5% over the past seven days.

Image Source: Zacks Investment Research

Price Performance & Valuation of T & SPCX

Since its IPO, SpaceX has plummeted 9.2%. AT&T has gained 2.9% compared with the industry’s growth of 120.3% over the same period.

Image Source: Zacks Investment Research

AT&T looks more attractive than SpaceX from a valuation standpoint. Going by the price/sales ratio, AT&T’s shares currently trade at 1.27 forward sales, lower than 24.73 for SpaceX.

Image Source: Zacks Investment Research

End Note

Both AT&T and SpaceX carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both AT&T and SpaceX expect sales to increase in 2026. In terms of price performance, T has outperformed SPCX. An uptrend in estimate revisions shows bullish investor sentiment for AT&T. Moreover, AT&T appears to have attractive valuation metrics compared with SpaceX. With an aggressive growth path (broadband upgrades + bundling + fiber densification), AT&T offers more upside potential and appears to be relatively better placed than SpaceX and hence, is a better investment option at the moment.

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