SpaceX's Starlink threat causes Bernstein to cut Verizon, AT&T, Comcast PTs

Wall Street is beginning to factor SpaceX's growing telecom ambitions into its outlook for the US communications sector.

Research firm Bernstein on Monday lowered price targets for five major telecom companies, citing valuation risks tied to SpaceX's Starlink business as investors increasingly assess the satellite operator's long-term competitive threat.

The brokerage reduced its target on Verizon to $44 from $49 while maintaining a "Market Perform" rating.

The revised target still implies an upside of roughly 3% from current trading levels.

Charter Communications saw its price target cut to $170 from $210, also with a "Market Perform" rating, suggesting upside of around 29%.

Bernstein also lowered Comcast's target price to $28 from $32 while maintaining a "Market Perform" rating.

AT&T's target was reduced to $25 from $30, although the stock retained its "Outperform" rating.

T-Mobile's target was lowered to $220 from $245 with a "Market Perform" rating.

Starlink is seen as adding pressure to a crowded market

The revisions come after reports last month suggested that SpaceX is preparing to launch a direct-to-consumer Starlink mobile service and is exploring plans to build its own terrestrial wireless network in the United States.

While Bernstein does not expect Starlink to materially disrupt incumbent telecom operators in the near term, the firm believes the company's expansion introduces another competitor into an already saturated broadband market.

According to the brokerage, a Starlink mobile offering could intensify competition further, making subscriber growth increasingly dependent on winning customers from rival operators rather than on attracting first-time users.

Bernstein added that uncertainty surrounding SpaceX's long-term telecom strategy is likely to persist, prompting it to adopt a more cautious stance across the sector.

The report also drew attention from television personality Jim Cramer.

"I don't want to own AT&T or Verizon," Cramer said during CNBC's Mad Dash segment on Monday, referring to Bernstein's revised outlook.

Investor perception of Starlink has shifted

Wall Street's assessment of Starlink has changed significantly over the past year.

The satellite broadband business was initially viewed primarily as a service for rural communities without reliable access to cable or fibre internet.

However, rapid subscriber growth and expansion into commercial aviation have led analysts to reconsider its long-term competitive position.

Starlink has doubled its subscriber base annually in recent years while securing broadband agreements with airlines including American Airlines and United Airlines.

The company's growth has strengthened investor confidence that it could eventually compete more directly with traditional broadband providers.

Wolfe Research analyst Peter Supino recently described Starlink as "a comet bearing down on broadband incumbents."

That view reflects growing concern that SpaceX could steadily capture broadband market share from cable operators such as Charter and Comcast, while also posing a longer-term challenge to fibre providers including Verizon and AT&T.

Among the major telecom companies, analysts generally view cable operators as the most exposed because broadband accounts for the bulk of their profits and their businesses rely heavily on ageing network infrastructure.

Although Starlink's immediate impact is expected to remain limited, analysts increasingly believe the company's ambitions warrant closer attention as SpaceX expands beyond satellite internet into broader telecommunications services.