AMT Stock Plunges 10% as Valuation Gap Widens Despite Earnings Surge

The share price fell to its lowest level so far this month, with an intraday decline of 2.41%.

American Tower Corporation (AMT) has seen its stock drop 10% over the past three months, despite reporting consistent revenue and earnings growth. The disconnect between fundamentals and valuation has drawn scrutiny, as the stock trades at a 30% discount to analysts’ price targets.

Institutional investors have added complexity, with major shareholders like Ausbil Investment Management and Tower Corp/Ma reducing stakes by 39.8% and 91.54%, respectively, while others, including Saudi Central Bank, have increased holdings. A discounted cash flow analysis suggests the stock is trading 33% below intrinsic value, highlighting potential undervaluation if market sentiment shifts.

The company’s third-quarter earnings of $2.78 per share exceeded expectations, and revenue grew 7.7% year-over-year to $2.72 billion, driven by 5G and data center demand. However, macroeconomic risks—such as rising interest rates and potential data center slowdowns—loom over its valuation. AMT’s 3.9% dividend yield remains attractive, but investors must weigh long-term infrastructure growth against sector-specific challenges like regulatory shifts and capital efficiency. While fundamentals remain robust, the current pullback underscores the need to monitor both internal execution and external market dynamics as the telecommunications infrastructure sector evolves.