There were some big moves in telecommunications stocks on Friday. On one hand, shares of cell tower owners Crown Castle (CCI +9.06%) and American Tower (AMT +4.08%) soared, with shares up by about 9% and 4%, respectively, as of midday. On the other hand, the three largest wireless carriers plunged, with Verizon (VZ -1.20%), AT&T (T -7.96%), and T-Mobile (TMUS -7.71%) all deep in the red.

Both moves are due to one company, SpaceX (SPCX +1.89%). On Thursday evening, Bloomberg reported that SpaceX is in talks to secure at least 80,000 cell sites across the United States as it aims to become the fourth nationwide wireless carrier. For context, 80,000 sites would represent about half of all the purpose-built cell towers in the U.S., so it would be a pretty big move.

Image source: Getty Images.

This is the second time in October that SpaceX has sent shockwaves through the telecom industry. First, on Oct. 9, SpaceX agreed to buy $8 billion in low-frequency wireless spectrum, and telecom stocks plunged. So, will SpaceX truly boost the tower companies and cost the telecom leaders money?

Why are the tower companies soaring?

First, a little context on how the cell tower business works. The owner builds a tower and then rents space on it to wireless carriers, typically under long-term leases. Next time you drive by a cell tower, take a look at the top. You'll probably see several rings of transmission equipment, and each of those represents a tenant. Since the tower is already standing, adding tenants produces extra revenue with very little additional cost.

CCI - Crown Castle $85.97 +$7.14 (+9.06%) NYSE · As of 4:00 PM ET 10/23/26 Premium Feature Moneyball Superscore 43 /100 Key data points Market cap Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. $36.58B Day's range $85.00 - $91.45 52wk range $65.32 - $98.36 Volume 17.3M Avg volume 4.2M Gross margin 56.82% Dividend yield 4.94%

Ever since Sprint was acquired by T-Mobile, the tower industry has essentially had three wireless customers. The majority of Crown Castle's rent comes from AT&T, Verizon, and T-Mobile. A well-capitalized fourth player would mean more tenants per tower.

This is also a notable expansion of SpaceX's plans. Although the company has made its telecom network ambitions known for some time, as recently as August, management described its network as small cells mounted on rooftops (not traditional towers). But without getting too technical, the low-band spectrum it bought makes large towers far more useful, so it makes sense to add them to the plan.

Of course, this isn't the first time a "fourth carrier" has emerged. Just a few years ago, Dish Network signed long-term tower leases to build its own 5G network. To make a long story short, Dish's parent company sold most of its spectrum in 2025 and began shutting down the network. Of course, SpaceX is a far more deep-pocketed tenant and could easily afford to build a nationwide network.

Should investors forget about the carriers?

SpaceX is certainly a threat to the big three wireless carriers, but the recent sell-off appears a bit overdone. After all, SpaceX would be starting with no wireless customers at all, it holds less spectrum than any of the others, and its service isn't expected to launch commercially until late 2027. And building a competitive network would be a multiyear process at a minimum.

Let's be clear. SpaceX could certainly pressure the three major wireless carriers over time, but this isn't exactly a death sentence for them either. All have existed in the past with a fourth competitor (Sprint), and pricing power hasn't changed that much since the number dropped to three.

The bottom line

If you're thinking about buying tower owners as a momentum play or telecoms at a discount, it might be a smart idea to be patient. For one thing, although Crown Castle was specifically mentioned as a company SpaceX was in talks with, there isn't a signed contract or any official management acknowledgment yet. And the telecom sell-off may be overdone, as all that is happening right now is that a potential competitor (who would be starting from scratch) is negotiating with landlords.

In a nutshell, the market is pricing in a deal that hasn't happened yet, and the reaction on both the tower owner and wireless carrier side may be a bit overdone. I'm keeping an eye on some of the stocks involved, but I'm waiting for further official developments before making any moves.