VZ, TMUS, T Stocks Face Valuation Pressure From SpaceX Wireless Push But Tower Operators Stand To Gain, Says Citi

The firm sees additional downside for established wireless carriers but views SpaceX's potential network expansion as a positive development for cell tower operators.

• Citi sees 29%-32% valuation risk for Verizon, T-Mobile and AT&T, with another 4%-16% potential downside from current levels.
• SpaceX is reportedly seeking access to at least 80,000 U.S. cell sites as it looks to establish a fourth nationwide wireless carrier.
• Citi views the development as positive for Crown Castle, SBA Communications and American Tower.

Verizon Communications (VZ), T-Mobile US (TMUS) and AT&T (T) stocks came into focus Friday after Citi warned of further valuation pressure on established telecom operators as SpaceX (SPCX) advances plans to enter the U.S. wireless market.

According to a note cited by TheFly, Citi sees 29%-32% valuation risk for the three carriers, with a 4%-16% downside potential from current levels following their pullbacks in 2026.

The firm believes SpaceX is likely to build its own telecommunications company to compete in the U.S. mobile market, rather than become a mobile virtual network operator, an outcome it considers unlikely.

At the time of writing, Verizon (VZ) shares fell more than 1%, while T-Mobile (TMUS) and AT&T (T) declined over 5% each. On Stocktwits, retail sentiment was ‘bearish’ for T-Mobile (TMUS) and Verizon (VZ), while AT&T (T) attracted ‘bullish’ sentiment.

SpaceX Eyes 80,000 Cell Sites For Nationwide Wireless Network

SpaceX is seeking access to at least 80,000 cell sites across the U.S. and is in discussions with major infrastructure providers, Bloomberg reported Thursday, citing people familiar with the matter.

The potential leasing agreements, which could be worth billions of dollars, would help SpaceX establish a fourth nationwide wireless carrier to compete with the country's dominant operators, the report said.

SpaceX has also pursued low-band wireless spectrum to complement its Starlink satellites and received Federal Communications Commission approval for 15,000 additional satellites designed to provide mobile service directly to phones.

During SpaceX's earnings call this week, CEO Elon Musk said the company plans to build terrestrial networks to provide broader connectivity wherever SpaceX and Starlink are permitted to operate.

Citi Sees Upside For Tower Operators

While Citi views SpaceX's potential entry as negative for established telecom operators, it considers the reported cell-site plans a net positive for Crown Castle (CCI), SBA Communications (SBAC) and American Tower (AMT).

According to the report, potential cell-site leasing agreements with SpaceX could be worth billions of dollars. Crown Castle, which operates approximately 40,000 U.S. cell towers, is among the companies reportedly in discussions with SpaceX.

Asked about potential leasing talks with satellite-based operators during Wednesday's earnings call, Crown Castle CEO Chris Hillabrant said, “You can assume that we're talking to all parties,” without disclosing specific customer discussions.

Tower Stocks Rally on SpaceX Report

The reported plans have already pressured telecom stocks while lifting shares of tower operators, reflecting investors' differing expectations for the two industries.

At the time of writing, CCI shares surged more than 10% to hit a four-month high, while SBA Communications (SBAC) and American Tower (AMT) gained around 4% and 6%, respectively.

Among tower stocks, retail sentiment on Stocktwits was ‘bullish’ for CCI and AMT stock, while sentiment around SBAC stock remained ‘neutral’.

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