The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (May 24)

by | May 25, 2024 | TSB

This was a quiet week from a value shift perspective with the Fab Five holding on to the gains from the week ending May 17th (+$46 billion last week, +$231 billion the last two weeks, and $1.4 trillion year-to-date). One of the other high-flying stocks (Nvidia) announced stallar earnings last week and stole the spotlight.

The Telco Top Five also had a quiet week (-$2 billion for the week, -$2 billion the last two weeks, and -$18 billion year-to-date). The biggest news of the week was Comcast’s StreamSaver announcement (here). The packages described in the nearby graphic are only available to Comcast customers (the NOW package is not available to non-Comcast customers, so we assume that it’s aimed toward Comcast broadband-only customers). It’s a good start, but, if you have not read it, have a look at last week’s Brief. The $15 product certainly adds value (and could help Comcast’s advertising efforts) but we have our doubts on the NOW bundle over the long-term, especially with Xumo content that is already available for free (or compared to the Verizon bundles described in the Brief).

J.P. Morgan held their annual Global Technology, Media and Communications Conference and many telecommunications companies participated. We are going to summarize the T-Mobile, Verizon, AT&T and Comcast discussions in next week’s Brief as a part of a larger Q2 preview, but think that this quote by AT&T CEO John Stankey concerning consumer trends was particularly interesting:

“In terms of what we’re seeing with the consumer base, consumer has been pretty resilient. I expect that’s going to continue through this year. Low end of the market clearly shows, as it typically does. As gas prices move up and down or fast food prices move up and down, you see stress showing up in certain parts of the low end of the market. We see it where customers are still paying. They’re still buying their services. They may move to credit card payment as opposed to cash payment. We see that ebb and flow a little bit since probably Christmas of last year, but nothing that concerns me. I think the path for this year looks pretty stable right now. What comes next year, too early to tell, we’ll see. We’ve got to keep an eye on. A lot of it will probably hinge on inflation and how well the administration does in kind of tempering things moving forward.”

Not a lot of worry, but clearly AT&T is looking at every indicator to gauge an economic downturn. These comments are similar to CEO interviews across multiple industries. More on Stankey’s comments (he had a lot of insights) in next week’s Brief.

File is below. We are stepping up our game with a more colorful value change chart (many thanks to Dave Grinstead for the edits). Comments and suggestions welcome.

Don’t forget to take time this weekend to remember those who made the ultimate sacrifice to keep our country free. Army Major David Taylor (Davidson, class of 1991) is one who made that sacrifice in Afghanistan – we are grateful.

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