AT&T stock climbed 4.8% to $24.06 following a strong second-quarter earnings report that outperformed Wall Street's forecasts. Trading volume surged over 80 million shares, about 57% above the daily average, signaling heightened investor interest.

The telecommunications giant posted adjusted earnings per share of $0.65, exceeding the consensus estimate of $0.59. Revenue slightly missed expectations, coming in at $31.56 billion versus the anticipated $31.80 billion, but this did little to affect market enthusiasm.

Cash Flow and Subscriber Growth Impress

The highlight was AT&T's free cash flow, which reached $4.7 billion a 6.3% increase compared to the same quarter last year and beyond the company's own forecast range of $4.0 billion to $4.5 billion. Adjusted EBITDA rose 5.2% year-over-year, hitting $12.3 billion, and the EBITDA margin improved by 110 basis points, reaching 39.1%.

Subscriber numbers also surpassed expectations significantly. AT&T added 432,000 postpaid phone customers, well ahead of the 338,500 analysts had predicted. the company gained more than one million new advanced connectivity subscribers, fueled by growth in fiber and fixed wireless services.

Following these results, AT&T raised its full-year 2026 earnings per share guidance to a range of $2.25 to $2.35. Wall Street currently projects $2.31. The quarterly dividend remains at $0.2775 per share, translating to a 4.6% yield.

According to Wolfe Research, which upgraded the stock after the earnings release, AT&T trades at about 6.7 times projected EV/EBITDA. This multiple is a discount compared to Verizon's 7.3 times and T-Mobile's 8.8 times, and below AT&T's own five-year average range of 7.5 to 8 times.

Several analysts adjusted their price targets post-earnings: Sanford C. Bernstein kept an “outperform” rating with a $25 target, TD Cowen raised its target to $33 though kept a “hold” rating, and Argus lowered its target to $30 but maintained a “buy” rating. Barclays reduced its target to $24 with an “equal weight” recommendation. The overall consensus rating stands at Moderate Buy, with an average price target near $29.19.

AT&T also confirmed a $10 billion share repurchase authorization, and short interest remains low at 1.81% of the float. Institutional investors control over 57% of the shares, highlighting steady confidence from major holders.

Unusually high call option activity after the earnings report suggests traders are positioning for further gains in the stock price.