AT&T, Verizon Dial Up Strong Q2 Results— ETFs Picking Up The Signal

The telecom industry is back in the limelight for all good reasons. While the S&P Telecom Select Industry Index has recorded a 40%+ rise over the last one year, the industry has outperformed the overall S&P 500, which increased by about 20% over the same time frame. Powering this growth? Solid profits from legacy behemoths such as AT&T Inc (NYSE:T) and Verizon Communications Inc (NYSE:VZ), an AI-driven growth story, and rumors of interest rate reductions that might reduce capital expenses companywide.

AT&T is giving the telecom industry a second wind. Check its prices live.

ETFs That Are Dialed In

A number of ETFs are well-positioned to capture the persisting strength in the telecom sector, particularly those with high weights in AT&T and Verizon.

iShares U.S. Telecommunications ETF (BATS:IYZ)

IYZ has the most concentrated play with a 14% holding in AT&T and 13% in Verizon. The fund has gained almost 3% over the last month (as of Friday) and is becoming a favorite among investors who seek a clean telecom signal.

SPDR S&P Telecom ETF (NYSE:XTL)

XTL, though more evenly weighted, still owns 3.6% of AT&T and 3.56% of Verizon, and is the strongest recent performer, up 5.6% over the last month.

Fidelity MSCI Communication Services Index ETF (NYSE:FCOM)

FCOM owns about 4% each of AT&T and Verizon. It’s up 2.8% over the last month, following wider sector enthusiasm.

Vanguard Communication Services ETF (NYSE:VOX)

VOX shares comparable exposure—4.3% in AT&T and 4% in Verizon—and gained 2.9% in the past month.

These ETFs not only reflect the comeback of telecom, but offer diversification into proximate plays such as streaming, gaming, and digital advertising—sectors increasingly intertwined via infrastructure and bandwidth.

Q2 Earnings: The Big Callers Deliver

Verizon rang up a respectable second-quarter report at the end of last month, as both revenue and profits exceeded analyst estimates.

The firm referenced wireless service revenues, customer gains, and fixed wireless access as primary drivers of the business. Verizon is calling for wireless service revenue growth of 2%-2.8% in 2025.

AT&T also ushered in a favorable quarter, posting adjusted earnings of 54 cents per share, compared to 51 cents last year. Revenue increased by 3.5% to $30.85 billion.

Also Read: AT&T Claps Back At Trump: ‘Not Our Network’s Fault — It’s Your Platform’

Rate Cuts + AI = Telecom’s New Signal Boost

Apart from robust fundamentals, the macro climate is becoming more favorable. President Trump’s repeated calls for interest rate reductions have the potential to lighten the load of costly capital spending, blessings for telcos pouring huge sums into next-generation infrastructure. In addition, optimism over AI has bestow a new light on the industry, with machine learning set to contribute more to network optimization, customer support, and even hardware deployment.

Collectively, these tailwinds are making telecom ETFs stand out.

Telecom is no longer a value trap. With AI winds at its back, positive earnings, and a potential rate cut on top, AT&T and Verizon are redefining what a “defensive” industry can do. For those investors who want to buy the upside without responding to every earnings call, telecom ETFs are a signal worth tuning to.

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