With Q1 earnings analysis largely in the rear view mirror, the Fab Five and Telco Top Five have settled into a pattern, with positive developments on the geopolitical front driving the Fab Five higher and “flight to safety” signals driving the Telco Top Five higher.
This was a week when geopolitical headlines took center stage and the Fab Five held on to their recent gains (+$27 billion for the week, +$443 billion for the last two weeks). Apple shares continue their ascent, and Microsoft continues to whittle down their 2026 losses (reduced by 46% since the last week in March). Capital deployments continue unabated, and AI adoption rates continue to grow as employers encourage (or demand) that everyone uses one of the current tools.
The Telco Top Five feel more like the Forgotten Five this week. Charter’s market capitalization is now half of Dish ($17 billion for Charter vs. $40 billion for Charlie Ergen), and Comcast continues its slide (now down 54% over the last five years). AT&T, Verizon, and T-Mobile are now in a tight valuation cluster with a mere $33 billion separating AT&T from T-Mobile, and $6 billion separating Big Red from Magenta. At the beginning of 2025, T-Mobile’s lead over their next largest US competitor was $88 billion; at the beginning of this year, that lead was $43 billion. What that lead will be after 2Q earnings is anyone’s guess.
On the macroeconomic front, inflation remains the primary concern (PPI and CPI reports here and here). The PPI numbers are particularly concerning as they show the ripple effect of fuel prices on transportation and materials (plastics, fertilizers, etc.) costs. That increase accelerated into May, which likely means 6.5-7.0% inflation at the producer level in the next report. As one Sunday Brief reader put it to me this week, “You can’t undo the costs of transportation – you can only average them down with the next delivery.”
Despite the turmoil created by higher fuel costs, the Atlanta Fed upped their real GDP estimate this week to 4.0%. Second and third quarter readings tend to be higher, and the sources for the increase are broad (see link here). With the distinct possibility of a surge in net exports driven by energy and defense, we could see additional upward estimates next week or in June.
That’s it for this week. If you are at the Fiber Connect show, catch up with us: we’ll be there Monday afternoon and Tuesday. File is below.
