Should You Consider Investing in AT&T Shares Following Its Amazon Leo Success?

AT&T Expands Fiber and Cloud Partnerships for Strategic Growth

Major U.S. telecommunications companies are intensifying their investments in fiber infrastructure and cloud collaborations, aiming to leverage their networks for long-term competitive strength. In this landscape, AT&T has partnered with Amazon Web Services (AWS) and Amazon Leo (previously Project Kuiper) to upgrade and reinforce the nation’s digital connectivity.

This alliance deepens an existing relationship by merging AT&T’s extensive fiber network with AWS’s advanced security, reliability, performance, and artificial intelligence solutions. As data usage surges and enterprise needs become more sophisticated, the two companies seek to deliver a more flexible and robust connectivity platform.

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To further this initiative, AT&T will link AWS data centers with high-speed fiber connections, enhancing the cloud infrastructure that supports large-scale customers. Additionally, AT&T is working with Amazon Leo, Amazon’s low-Earth-orbit satellite division, to extend fixed broadband access to business clients in regions where traditional connectivity is lacking.

The market reacted positively to these developments, with AT&T shares climbing 1.5% on Wednesday, February 4. As investor optimism grows, the focus shifts to whether this collaboration can sustain momentum and drive additional gains for the stock.

AT&T Company Overview

Based in Dallas, Texas, AT&T is a leading global provider of telecommunications and technology services, offering wireless, broadband, and network solutions. With a market capitalization approaching $192.3 billion, AT&T delivers mobile plans, internet services, voice communications, and managed connectivity, as well as selling devices through both retail and online platforms.

The company’s stock has shown notable improvement, rising 10.96% over the past year. In the last month alone, shares advanced by 11.46%, and the most recent five trading days saw an additional 3.5% increase.

Despite these gains, AT&T’s valuation remains conservative, with the stock trading at 11.82 times forward adjusted earnings—a figure below the sector average, suggesting the shares are relatively undervalued.

Dividend and Income Highlights

AT&T continues to attract income-focused investors. The company pays an annual dividend of $1.11 per share, yielding 4.06%. The latest quarterly dividend of $0.28 per share was distributed on February 2 to shareholders on record as of January 12.

AT&T Exceeds Q4 Earnings Expectations

On January 28, AT&T’s stock surged 4.7% following the release of its Q4 2025 results, which surpassed analyst forecasts and included robust guidance for the next three years.

Quarterly revenue increased 3.6% year-over-year to $33.5 billion, outpacing Wall Street’s estimate of $32.7 billion. Adjusted earnings per share rose 20.9% to $0.52, beating expectations of $0.46. Adjusted EBITDA climbed 4.1% from the previous year to $11.2 billion, reflecting greater operational efficiency.

Strong subscriber growth further validated the results, with 283,000 net additions for AT&T Fiber and 221,000 for AT&T Internet Air. For the second quarter in a row, the company achieved over half a million combined net additions in advanced home internet, highlighting ongoing demand for high-speed service.

Looking forward, management projects consolidated adjusted EBITDA growth of 3% to 4% in 2026, accelerating to at least 5% by 2028. Adjusted EPS is expected to reach between $2.25 and $2.35 in 2026, with a double-digit compound annual growth rate anticipated through 2028.

Free cash flow is also expected to rise, with management forecasting an increase of over $1 billion in 2027 and about $2 billion in 2028, primarily driven by EBITDA growth. This should support dividends, reinvestment, and financial flexibility.

Analyst consensus aligns with management’s positive outlook. Projections for Q1 2026 call for EPS of $0.55, representing 7.8% year-over-year growth. For fiscal 2026, earnings are expected to reach $2.31, up 9%, with a further 10% increase to $2.54 anticipated in 2027.

Analyst Perspectives on AT&T Stock

Deutsche Bank’s Bryan Kraft recently increased his price target for AT&T shares to $33 from $31, maintaining a “Buy” rating and highlighting the company’s strong Q4 performance and new multi-year guidance.

Overall, Wall Street rates AT&T as a “Moderate Buy.” Of 28 analysts, 15 recommend a “Strong Buy,” three suggest a “Moderate Buy,” nine advise “Hold,” and one gives a “Strong Sell.”

The average price target stands at $29.60, indicating a potential 9% upside. The highest target, at $34, suggests a possible 25% gain from current levels.