Jim Cramer: AT&T is a "Really Good Situation"

Jim Cramer, a finance expert with experience at Bloomberg, believes AT&T is a "really good situation" despite his previous reservations. He thinks the company is one of the best in the industry and would be a buyer of the stock. Cramer acknowledges the potential of AT&T as an investment but notes that certain AI stocks offer greater upside potential and carry less downside risk.

AT&T Inc. (NYSE: T) has experienced a significant rally in its stock price over the past year, with a nearly 50% increase [1]. This surge has raised questions among investors about the sustainability of the company's performance. Despite these concerns, AT&T remains a cheap investment option, with a market capitalization of $202.27 billion and a price-to-earnings ratio of 17.25 [1]. The company's strong performance is driven by strategic investments in fiber optic and 5G networks, which are crucial for future growth [2]. AT&T's initiatives, such as bundling fiber internet with 5G wireless and edge computing services, have contributed to its success. Additionally, the acquisition of Lumen's fiber business and partnership with Ericsson are expected to further enhance its market reach and capabilities [2].

However, AT&T faces challenges that could impact its future growth. The company has seen a nearly 219% increase in call options trading activity, indicating significant investor interest and potential volatility [1]. Additionally, the company's earnings per share (EPS) are expected to decline in the near term, with analysts forecasting a profit of $0.51 per share for the second quarter of 2025 [2]. This represents a 10.5% decrease from the year-ago quarter and a 10.2% decline for the full year [2].

Jim Cramer, a finance expert with experience at Bloomberg, believes AT&T is a "really good situation" despite his previous reservations [3]. He thinks the company is one of the best in the industry and would be a buyer of the stock. Cramer acknowledges the potential of AT&T as an investment but notes that certain AI stocks offer greater upside potential and carry less downside risk [3].

BofA Securities has reinstated coverage of AT&T with a Buy rating and a price target of $32.00 [2]. The firm cites AT&T’s balanced strategy to drive accelerating growth through its owned wireless and fiber assets as a key factor in the positive outlook. BofA also highlights the company’s potential for margin and free cash flow expansion based on wireless and wireline network efficiency. AT&T’s strong return of capital plans, with $40 billion targeted, further supports the Buy rating [2]. The company is also positioned to benefit significantly from the potential reintroduction of bonus depreciation, which BofA estimates could increase free cash flow by 21% in 2026 and 26% in 2027 [2].

Liberty One Investment Management LLC bought a new stake in AT&T during the 1st quarter, according to the company's most recent 13F filing with the Securities and Exchange Commission [4]. The fund bought 1,002,592 shares of the technology company's stock, valued at approximately $28,353,000. AT&T makes up 2.9% of Liberty One Investment Management LLC's portfolio, making the stock its 14th largest holding [4].

In conclusion, AT&T Inc. continues to navigate a challenging but promising landscape. While the company faces near-term earnings headwinds and market volatility, its strategic investments and growth initiatives position it as a resilient investment option. Jim Cramer's endorsement and BofA Securities' positive outlook add further credibility to AT&T's prospects. Investors should closely monitor the company's performance and assess the potential for future growth.

References:
[1] https://www.marketbeat.com/instant-alerts/stock-traders-buy-high-volume-of-att-call-options-nyset-2025-07-09/
[2] https://uk.investing.com/news/analyst-ratings/bofa-securities-resumes-att-stock-coverage-with-buy-rating-32-target-93CH-4158917
[3] https://www.cnbc.com/2025/07/07/jim-cramer-says-trumps-latest-round-of-tariffs-isnt-meaningful.html
[4] https://www.marketbeat.com/instant-alerts/filing-liberty-one-investment-management-llc-buys-shares-of-1002592-att-inc-nyset-2025-07-08/