Second quarter earnings season ended for the Fab Five and the Telco Top Five this week. Reaction was mixed, with Amazon, a more consumer-spending focused stock, taking a nosedive after earnings indicated a slowing economy. Apple, Meta/ Facebook, and Google (who reported last week) were all basically unchanged. Only Meta emerged from the earnings season with a higher market capitalization.
The Fab Five peaked in 2024 with peak market capitalization gains of $2.8 trillion for the week ending July 5. Since then, the group as a whole has lost $1.3 trillion in value (emphasis added) or something just shy of the entire Telco Top Five’s value creation since inception. We will talk more about Fab Five spending in the data center space in next week’s Brief.
On the Telco Top five front, T-Mobile announced earnings this week (earnings package here) which exceeded expectations on nearly every KPI. They spoke about the benefits of their recent (Lumos and Metronet) fiber acquisitions yet gave no indication that additional deals were in the offing. Next week’s Brief will focus on T-Mobile’s pole position, and why their next acquisition might not be a fiber-to-the-home (FTTH) company.
One item worth noting is that AT&T’s equity value is beginning to grow and, as of Friday’s close, they are within $20 billion of Comcast. We noted their steady (yet, in our opinion, below expectations) performance in last week’s Brief and believe that, as the saying goes “location, location, location” matters for FTTH.
One final item given Jim’s participation at the recent Fiber Connect show was he comment by Alan Davidson at the NTIA that states would have discretion to determine which technology (or blend of technologies) could be used to satisfy universal broadband efforts (excellent article here from Fierce). While the NTIA issued these only as a draft, we think that there’s a reality settling in that the state allocations and regulations were probably a bit too rigid. If the NTIA changes this rule midway through the process, what other ones will they be revising? We think that fiber can get much deeper with more program coordination (state, federal, highway, FTTH, etc.). Using licensed fixed wireless to serve the most remote areas is a terrific idea, and one that should have been embraced long ago by the NTIA. If the rules change on “how” shouldn’t the overall funding levels be reexamined as well?
File is below. Note that share counts and net debt charts have not been updated, but we did include the schedules for cable MVNO net adds for all publicly disclosed cable providers as well as those used in last week’s Brief. All schedules will be updated by next Friday (Aug 9) and will be posted prior to the full Brief (slated for 8/11).
