With interest rates cresting to their highest levels in over a decade (10-yr note briefly touched 5% this week as the yield curve begins to reverse its inversion), it’s not too surprising to see equities turn down. This week, the Fab Five lost $188 billion in value, and now have a cumulative market capitalization of approximately $9 trillion. Apple led the decline with a $93 billion weekly loss.

The Telco Top Five fared better, with valuations flat for the week as gains at AT&T (+$7 billion) offset losses at T-Mobile (-$6 billion) and Comcast (-$4 billion). Interestingly, Verizon ticked up on AT&T’s strong earnings (our first take on Thursday’s release is here – more in next week’s Brief). We think that’s a misguided assumption as AT&T’s earnings strength came more from consumer wireline (AT&T fiber) and substantial headcount reductions than from growth in wireless.

The one item we think is being underreported is AT&T’s growth in the “reseller” category. Here’s the subscriber growth from their earnings release:

Note the growth over the last two quarters that is no longer going to T-Mobile wholesale. While it’s baked into T-Mobile analyst estimates, we aren’t quite so sure that it’s fully accounted for in AT&T earnings estimates. Wholesale is underreported for a reason: it’s super-high margin business for the network provider. With over one million new [presumably] Dish customers coming over to AT&T in the last 180 days, it’s going to have an impact on 2024 earnings.

There was other news in the telecom industry this week: Consolidated Communications received a new offer for the company (~$4.70/ share, article here), and Frontier reported that Jana Partners had taken a stake in the company accompanied with a not-so-subtle message that they should explore ways to take the company private (more here in this Fierce Telecom article). Nokia announced that they are going to have a substantial layoff (no surprise – CNBC analysis here) and Mediacom announced that they will be distributing Xumo streaming devices to all Internet subscribers (a strategy that makes a lot more sense than Charter’s – Light Reading article here).

The big news comes this week with the rest of the Telco Top Five reporting earnings. Four of the Fab Five also report. See last week’s Brief for the full earnings schedule. We will have short “first take” posts following each Telco Top Five release followed by a deeper Part 1 of our earnings summary next Sunday morning. Buckle up – it’s earnings season.

File is below. Apple iPhone availability charts will be out before Chiefs/ Chargers kickoff Sunday (~4:20 ET). Have a great rest of the weekend!