Telecom ETFs Gain Momentum As Sector Giants AT&T, Verizon, T-Mobile Reinforce Investor Confidence

The U.S. telecom sector has delivered a robust performance over the past year, outpacing broader market gains. The S&P Telecom Select Industry Index surged around 37% over the past year, significantly outperforming the S&P 500's 22.95% gain.

This strength has inevitably seeped into telecom-focused ETFs, making them attractive investment avenues. Here are three ETFs that could be a door for investors to ride this wave:

Strong gains in several telecom ETFs speak of the sector's bullish momentum:

• Vanguard Communication Services ETF VOX: Up 10% over the past three months and 31.36% over the past year.
• Fidelity MSCI Communication Services Index ETF FCOM: Climbed 9.83% in the past three months and 31.52% over the past year.
• iShares U.S. Telecommunications ETF IYZ: Gained 6.7% over three months and 15% in a year.

Also Read: Top 3 Tech And Telecom Stocks That Could Lead To Your Biggest Gains This Quarter

The telecom sector's outlook remains optimistic, considering the positive forecasts in artificial intelligence. Moreover, interest rate cuts throughout 2024, and President Trump’s push for further rate reductions, could support positive sentiments and hence, industry growth.

Notably, telecom giants AT&T T, Verizon VZ, T-Mobile TMUS and Comcast CMSCA reported relatively healthy Q4 earnings, reinforcing investor confidence:

• Comcast exceeded Wall Street's expectations, driven by strong broadband revenues, despite customer losses. Earnings per share (EPS) is at 96 cents adjusted revenue at $31.92 billion; net income was $4.78 billion, up 47% year over year, and adjusted EBITDA growth of 10%.
• Verizon's Q4 results reflected healthy growth, with both revenue and earnings surpassing estimates. Its EPS was recorded at $1.10 adjusted, revenue at $35.68 billion, and net Income at $5.11 billion, rebounding from a loss a year ago.
• AT&T reported strong subscriber growth and operational efficiency gains, with EPS and revenues at $0.54 and $32.3 billion respectively. Net Income of $4.03 billion nearly doubled from a year ago.
• T-Mobile’s stock gained after it reported strong fourth-quarter results, surpassing analyst expectations. Its EPS was $2.57, and revenue came in at $21.87 billion.

U.S. telecom ETFs remain well-positioned for continued growth thanks to strong corporate earnings and an optimistic industry outlook.

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