T-Mobile US (TMUS) is positioned to use artificial intelligence to raise prices, reduce costs and grow new services, while closing its pricing gap with peers, Oppenheimer said.
The brokerage said in a Tuesday note that the company is positioned to use AI across its operations to support pricing power, expense reductions and new service growth. Management also recognizes that low latency is critical for physical AI inferencing and is taking steps to support next-generation network demand.
Noting T-Mobile US' two new fiber joint ventures, Oppenheimer said the company sees fiber as an equity value creation opportunity rather than part of the convergence proposition and expects continued pursuit of additional fiber acquisitions under similar structures.
The investment firm also highlighted the potential for a merger with Deutsche Telekom, which would require approval from minority shareholders and could command an attractive premium, adding to long-term optionality.
The company's long-term guidance is likely conservative and there's room for upside from mergers and acquisitions and synergies, the note added.
Oppenheimer upgraded its rating on T-Mobile US stock to outperform with a $260 price target.
Shares of T-Mobile were up 5.4% in Wednesday trading.
Price: $196.88, Change: $+10.16, Percent Change: +5.44%