The communication services sector is performing well in 2025, with an 11.41% gain, outpacing the S&P 500. AT&T’s stock has risen over 19%, and the company reported Q2 earnings beating estimates. However, AT&T lost its Dividend Aristocrat status in 2022, but with strong forward guidance, income investors may reconsider.

AT&T’s Q2 earnings included revenues of $30.8 billion, net income of $4.9 billion, and strong cash flow. Earnings are expected to grow by 6.07% next year, with growth seen across business segments, including mobile services and consumer broadband.

Despite losing its Dividend Aristocrat status, AT&T still offers a 4.06% dividend yield. Wall Street remains bullish on the stock, with a moderate buy rating and an average price target of $29.17, indicating a 6.04% potential upside.

The company’s competitive moat, scalability, and customer retention have contributed to its success. AT&T’s wireless business is the third-largest in the US, with extensive communications infrastructure reaching millions. The stock is recommended by analysts for potential growth.

Read more at Nasdaq: Is Former Dividend Aristocrat AT&T a Buy After Q2 Earnings?