<\/p>\n
AT&T (T) has a new problem on Wall Street.<\/p>\n
The telecom behemoth has spent years trying to convince investors that its story is greater than dividends, debt reduction and old-school wireless service.<\/p>\n
That effort has been strengthened. AT&T has been busy extending its fiber footprint, investing big amounts in 5G, and working to rebuild its balance sheet.<\/p>\n
But a new concern has entered the discussion.<\/p>\n
AT&T shares recently took a dive after Oppenheimer downgraded the stock, warning that Starlink could pose a stronger threat to existing communications providers over time.<\/p>\n
Investors have to price that risk in.<\/p>\n
But AT&T\u2019s newest tie-up hints that Wall Street might be forgetting another piece of the story.<\/p>\n
AT&T will provide 5G connection for Rivian\u2019s (RIVN) R2 electric car platform across the U.S. and Canada, the company said, building on a cooperation that began in 2023.<\/p>\n
The agreement provides AT&T a bigger role in the connected car market, a space that might help the firm make money from its network beyond phones, fiber and residential broadband.<\/p>\n
AT&T expands its Rivian connected-car business<\/p>\n
The Rivian deal isn\u2019t just about adding wireless service to another car.<\/p>\n
It signals a broader transition in the auto sector.<\/p>\n
Cars are increasingly becoming software platforms that require ongoing connectivity to allow for navigation, entertainment, AI assistants, real-time services and over-the-air software updates.<\/p>\n
This shift creates an opportunity for companies like AT&T.<\/p>\n
Key takeaways from AT&T’s Rivian dealAT&T will provide 5G connectivity for Rivian\u2019s R2 platform.The agreement expands a relationship first announced in 2023.The network will support software updates, infotainment and artificial intelligence-powered features.The deal strengthens AT&T\u2019s position in the connected vehicle market.It gives investors another growth angle beyond wireless and broadband.<\/p>\n
The companies said an AT&T network will allow Rivian R2 owners to receive faster software upgrades, improved infotainment and linked services that potentially expand the vehicle\u2019s capabilities after it leaves the factory.<\/p>\n
\u201cConnectivity is increasingly central to how vehicles are designed, delivered, and improved,\u201d AT&T Connected Solutions Vice President Matt Harden said in a company statement.<\/p>\n
That line matters because it explains why the Rivian deal fits AT&T\u2019s broader strategy.<\/p>\n
Related: AT&T, Verizon back $1.2B broadband bet in space tech leader<\/p>\n
The company already connects millions of autos and fleet vehicles. AT&T has an opportunity to turn its 5G network into a regular revenue stream for enterprises as automakers switch to software-defined vehicles.<\/p>\n
Bloomberg / Getty Images<\/p>\n
AT&T’s financial story is bigger than Starlink<\/p>\n
The AT&T profits profile won\u2019t change overnight with the Rivian deal.<\/p>\n
That\u2019s not the point.<\/p>\n
The real question is, can AT&T leverage its network to produce growth in areas that Wall Street may be underestimating?<\/p>\n
The company reported $31.5 billion revenue in the first quarter, up 2.9% year over year. Adjusted earnings per share rose to 57 cents from 51 cents a year earlier, while EBITDA rose to $11.8 billion.<\/p>\n
AT&T remained on the list of top dividend stocks, with $7.6 billion in operating cash flow.<\/p>\n
Those numbers go a long way to explaining why many investors still view AT&T as a secure income investment.<\/p>\n
But the company needs more than just stability.<\/p>\n
If Starlink begins to take market share in the broadband industry over time, AT&T will have to show how its investments in 5G will fuel growth in other categories.<\/p>\n
This is where connected cars, enterprise services and the Internet of Things come in.\u201d<\/p>\n
More AI:<\/p>\n
Micron sits at the center of a red-hot chip rallyIBM CEO sends blunt message on AI and quantum computingAnthropic CEO makes shocking admission about AI<\/p>\n
The Rivian partnership gives AT&T a neater growth story at a time when investors are all about disruption.<\/p>\n
Wall Street may have a point about Starlink.<\/p>\n
But AT&T\u2019s new relationship illustrates that the business is not standing still.<\/p>\n
It is looking to make its network the backbone for more connected devices, more connected automobiles and more enterprise services.<\/p>\n
Maybe that’s the part of the tale investors are missing.<\/p>\n
Related: AT&T rolls out new phone plan to keep customers from leaving<\/p>\n
#ATampT #lands #Rivian #win #Wall #Street #sees #growing #threat<\/p>\n","protected":false},"excerpt":{"rendered":"
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