FAA Chief Warns System ‘Will Continue to Break.’ AT&T, Verizon, and Lumen Could Be Big Winners

Detailed summary

When the nation's top aviation regulator admits the air traffic system is guaranteed to fail again, someone gets paid to fix it. One telecom giant already holds a foothold in the contract, and its stock may be pricing in far too little.

FAA Administrator Bryan Bedford gave a frank assessment after the latest air traffic disruption. The nation's aging control system "will continue to break" until it is replaced, he said. He also named the companies working on the new architecture: AT&T, Verizon and Lumen. For AT&T (NYSE:T), the warning comes while the stock is down 6.36% year-to-date at $22.19. Over the same stretch, the business just posted its best consolidated service revenue growth in more than four years. Reaching $30 per share in 2027 will require AT&T to execute on several areas.

Analysts' average target of $27.59 implies 24% upside. AT&T has beaten EPS estimates in six consecutive quarters. In the third quarter it earned $0.65 in adjusted EPS against a $0.60 estimate, and revenue rose 5.3% to $32.32 billion. Management raised its 2026 adjusted EPS outlook to the $2.40 range and is targeting free cash flow of $19B+ in 2027.

Today AT&T trades at 9x forward earnings. At $30, that multiple would rise to about 12x.

Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.

Verizon (NYSE:VZ) and Lumen Technologies (NYSE:LUMN) are possible additional winners. Verizon's CFO said the carrier "returned to growth in the public sector." Lumen reported AI traffic growth of more than 1,000% since April. Bedford's comments did not set any revenue allocation among the three companies, though.

The 35% gain needed is ambitious for a stock with a beta of 0.494. Still, AT&T has traded as high as $28.43 within the past 52 weeks, and shares have returned 56.06% over five years. Reaching $30 would mean slightly exceeding a level the stock touched recently.

Hitting $30 would take a 35% gain in 2027. Analysts already see 24% upside, earnings keep beating forecasts, and Bedford's warning…

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