AT&T heads into mid-August having added nearly 17% in a month, yet the options market is the least defensive it has been all year — a divergence that makes the current setup genuinely interesting.
The clearest tension is in options positioning. Call demand has surged relative to puts, driving the put/call ratio down to 0.65 — more than three and a half standard deviations below its 20-day average of 0.74. That is the most bullish options skew AT&T has seen in the past 52 weeks, which sat at a high of 0.94 and a low of 0.49. Normally, a sharp rally invites hedging; here, investors appear to be chasing the move rather than protecting against a reversal.
Short interest tells a more complicated story. Bears have been quietly rebuilding positions into the rally. Short interest as a percentage of the free float climbed to 1.8%, up 15.6% week-on-week and 32% over the past month — the sharpest one-month build in the observable history here. The absolute level remains low; 1.8% of float is not a heavily shorted name. But the direction of travel — adding shorts as the stock rallies 17% in a month — suggests a meaningful pocket of the market believes this move has gone too far. The lending market offers no friction to would-be shorts: borrow availability is extremely loose at roughly 9,447% of short interest, meaning there are billions of shares still available to lend. Cost to borrow sits at just 0.37%, barely above the risk-free rate. There is no squeeze mechanism here.
The Street reflects a broadly constructive but divided view. Analyst activity was heavy in late July, triggered by Q2 results on July 22 that sent the stock up 3.1% the next day and 7.5% over the following week. Wolfe Research upgraded to Outperform with a $29 target. Morgan Stanley — a bellwether worth naming — maintained Overweight and lifted its target to $27 from $25. Most other firms raised targets modestly while keeping existing ratings. The outlier is Wells Fargo, which maintained Underweight and lifted its target only to $20 — implying roughly 20% downside from current levels at $24.89. That gap between the most bearish target and the current price is notable. The consensus sits at Buy with 11 buy ratings, and the ORTEX factor score for EPS surprise ranks in the 73rd percentile, reflecting a track record of beating estimates. Valuation, meanwhile, has re-rated sharply: the price-to-book multiple has risen 0.19x over the past 30 days, and the P/E now sits near 9.9x — still undemanding in absolute terms, but up meaningfully from where it was a month ago.
On the bull side, the converged services strategy and 74 million postpaid phone customers underpin the revenue base, with EBITDA growth targeted at 6% in 2026. Bears point to ARPU pressure dragging wireless service revenue growth toward just 2% and warn the legacy copper-to-fiber transition creates an EBITDA headwind that becomes more acute beyond 2027. The high payout ratio — expected above 100% through at least 2028 — remains the structural concern that prevents the stock from attracting a wider investor base. Institutionally, the picture is broadly supportive: BlackRock added 4.2 million shares to a position of 559 million, State Street added 18.5 million, and JPMorgan Asset Management added 4.8 million. GQG Partners and Dimensional both added over 5 million shares. No meaningful institutional selling is visible among the top holders.
The next catalyst is Q3 results, scheduled for October 21. After the last print, the stock moved 3.1% on the day and extended that to 7.5% over the following week — a notably clean positive reaction. What to watch between now and then is whether the short-interest rebuild accelerates as the stock consolidates near $25, and whether the unusually bullish options positioning — currently at its annual extreme — begins to normalize as the post-earnings momentum fades.
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