AT&T Stock Slips Despite an Earnings Beat. Why Investors Were Looking for More.

AT&T stock has outpaced rivals Verizon and T-Mobile so far this year. (Courtesy AT&T)

AT&T stock was a touch lower on Wednesday, even though the wireless carrier topped Wall Street’s earnings expectations. Investors may have been looking for perfection after rival Verizon Communications posted a beat-and-raise on Monday.

Shares slid 3.7% to $26.41 in premarket trading. Futures tracking the benchmark S&P 500 were up 0.3%.

AT&T reported second-quarter adjusted earnings of 54 cents a share ahead of the opening bell, as revenue climbed 3.5% from a year ago to $30.8 billion. Analysts were expecting earnings of 53 cents a share on revenue of $30.5 billion, according to a FactSet poll.

The company said it expects to save $6.5 billion to $8 billion due to President Donald Trump’s signature tax bill. It laid out a plan to invest $3.5 billion worth of those savings into building out its fiber network, as Big Wireless accelerates its pivot to offering “bundles” that combine TV, 5G mobile, and broadband under one deal.

AT&T tweaked parts of its annual guidance but still expects to report earnings of between $1.97 and $2.07 a share and free cash flow of about $16 billion this year, having previously forecast those figures at an investor day in December.

The market was probably hoping for an earnings guidance hike, given that Verizon upped its own outlook on Monday, citing strong first-half performance and the boost from Trump’s tax reforms.

Investors may also have been looking for an excuse to lock in profit, as AT&T has been trouncing its rivals and the broader market so far this year. Shares are up 20% in 2025, compared with a 7% gain for the S&P 500. Verizon and T-Mobile US are up 7% and 6%, respectively.

The stock surged in April when the U.S. started imposing sweeping tariffs on its trading partners, with investors seeing telecom as a good place to hide.

First-quarter results suggested AT&T’s cheaper plans were luring customers away from its rivals, and analysts are also bullish on the deal the company struck to buy Lumen’s residential fiber broadband network.

Write to George Glover at george.glover@dowjones.com