--- title: "SpaceX's Spectrum Deal Hits Telecom Stocks but Gives Tower REITs a New Opportunity" type: "News" locale: "en" url: "https://longbridge.com/en/news/302209016.md" description: "SpaceX's $8 billion spectrum deal with Grain Management caused significant drops in AT&T, Verizon, and T-Mobile shares due to competitive concerns, while boosting tower REITs like Crown Castle. Analysts view the threat as long-term, noting SpaceX still needs massive infrastructure investment. Tower REITs gained on potential leasing opportunities for SpaceX's terrestrial network." datetime: "2026-10-18T13:20:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/302209016.md) - [en](https://longbridge.com/en/news/302209016.md) - [zh-HK](https://longbridge.com/zh-HK/news/302209016.md) generator: "portal-rs" --- # SpaceX's Spectrum Deal Hits Telecom Stocks but Gives Tower REITs a New Opportunity SpaceX NASDAQ: SPCX just sent shockwaves through shares of legacy telecom giants, with some stocks experiencing historically large drops after the firm’s latest announcement. SpaceX has agreed to acquire low-band wireless spectrum licenses from Grain Management, with reports indicating a purchase price near $8 billion. This move signals SpaceX’s ambition to compete with the top dogs in telecom when it comes to offering cell phone coverage. SpaceX purchased a spectrum that effectively penetrates buildings. This contrasts with its Starlink satellite service, which requires an unobstructed view of the sky to provide a stable connection. In turn, analysts see the move as one that could help SpaceX compete for wireless customers in urban environments over time. While telecom leaders tanked on this news, another key portion of the telecom ecosystem, tower real estate investment trusts (REITs), caught a bid. ## AT&T, Verizon, and T-Mobile Get Clobbered After SpaceX’s Spectrum Purchase After this news broke, AT&T NYSE: T dropped approximately 10.8% in one day, Verizon Communications NYSE: VZ fell 10.1%, and T-Mobile US NASDAQ: TMUS fell by 13.3%. This marked T-Mobile’s worst single-day decline since becoming a public company, and overall, these were very large declines for stocks that tend to have relatively low volatility. Clearly, investors viewed this move as a substantial threat to the competitive positions of these legacy wireless carriers, or at least reacted as if it were. However, these names have recovered meaningfully over the following days, suggesting that markets initially overreacted to this news. This lines up with the perspective of some Wall Street analysts, who have framed SpaceX’s move as just one step in a protracted and expensive journey to compete with telecom incumbents. For example, MoffettNathanson notes that although SpaceX has secured the spectrum assets needed to penetrate buildings, the firm would still need to invest in terrestrial network infrastructure to use this spectrum. The firm estimates that this would cost tens of billions of dollars and take many years to build, aligning with comments from T-Mobile CTO John Saw, who emphasized the time, investment, and infrastructure required to establish a competitive wireless network. Analysts at UBS have also noted that legacy carriers still have far more spectrum assets than SpaceX. At 77 megahertz (MHz) of spectrum, this is around one-fourth or less than the 300–350 MHz of spectrum controlled by other carriers. Analysts have also remained relatively poised when it comes to adjusting their price targets on legacy carriers. This includes Scotiabank, which lowered its T-Mobile target by just 2.3% to $212, lowered its Verizon price target by 2.9% to $50, and lowered its AT&T price target by 3.6% to $26.50. Conversely, Raymond James actually upgraded T-Mobile from Market Perform to Outperform, despite placing a relatively low $170 target on the stock. Raymond James noted, “We believe the recent fears over competition from SpaceX are overblown, as they are 3+ years away from becoming a reality." ## Tower REITs Soar on New Customer Potential On the other side of the equation, tower infrastructure players like Crown Castle NYSE: CCI got a huge boost after SpaceX’s announcement. Crown Castle rose 15.6%, good for its largest single-day gain in over 10 years. The thought process is that leasing space on current towers owned by these operators would be an efficient and cost-effective way for SpaceX to build out its terrestrial network. Some analysts believe that SpaceX will shift from a femtocell-based approach to a traditional tower approach, increasing the likelihood of these operators gaining a new customer. The company’s proposed femtocell approach has faced significant skepticism from telecom analysts, who question whether femtocells can provide broad coverage. Each femtocell would provide coverage over a much smaller area than traditional towers, with T-Mobile estimating over one billion femtocells would be needed to offer strong, broad-based coverage. This approach could make it difficult for SpaceX to deliver adequate customer satisfaction and thus compete with traditional carriers. However, it is possible that SpaceX will pursue a mixture of femtocell and tower-based connections. ## Watch Items: Tower Negotiations and Telecom Commentary Looking ahead, it will be worth monitoring the upcoming earnings calls of carriers and tower REITs. Notably, many of these names report over the next one to two weeks. Any commentary from tower operators about SpaceX actually beginning to negotiate lease agreements would be significant. This would indicate that the firm is serious about this approach and that tower operators have a legitimate chance of gaining another large customer. For carriers, it appears that SpaceX’s move may not pose a significant competitive threat in the near term. However, management teams are likely to face questions about this development on their upcoming calls. Their comments on SpaceX’s potential to compete in wireless coverage could be telling. These management teams have a ripe opportunity to dispel investor fears by fleshing out the hurdles that SpaceX faces in truly competing against them. Strong rebuttals from these teams could help further restore investor confidence. ## Should You Invest $1,000 in SpaceX Right Now? Before you consider SpaceX, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and SpaceX wasn't on the list. While SpaceX currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here Continue following MarketBeat Add MarketBeat as your preferred source on Google to see our latest stories in your feed. 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