Memorial Day Greetings from Florida, Iowa, and Missouri. The picture is from our dog’s (Abby) recent visit to the Springfield (MO) farm where she awarded the Editor with multiple prize turtles. Spring in the country – can’t beat it.
In addition to the long form videos shared below, be sure to check out the long-anticipated appearance on Roger Entner’s The Week With Roger podcast recorded this past week. It should be posted by Tuesday here as well as on your favorite podcast app. We discuss a wide variety of industry trends including the proposed Charter/Cox and AT&T/ Lumen Mass Markets mergers. Roger is a terrific host and friend.
Many of you will be attending the Fiber Connect conference. CellSite Solutions will be represented on Tuesday, June 3rd. Please reach out directly at [email protected] if you are interested in catching up. Also keep your eyes open for an upcoming MoKan lunch in St Louis in mid-July – more details on that here.
One additional administrative note – we will be publishing a Brief on June 8th and June 22nd and will be converting those of you who are email subscribers to Wordpress the week of July 6th.
The fortnight that was
Holiday weeks tend to be quiet. This market is trending lower in the absence of news because of global macroeconomic uncertainty. Both Microsoft and Google held developer conference events this week (Google’s is linked below), and both were warmly received. Overall, the Fab Five were down $327 billion for the last week but are up $393 billion over the last fortnight. Microsoft and Meta are both up for the year, and the others have pared the worst losses from early April (Fab Five are up $1.7 trillion from the April 6 lows).
The Telco Top Five are up $70 billion for the year, with four of the five stocks up so far for 2025. AT&T and Charter are both up ~20% year-top-date, and, coincidentally, are two who will be involved in substantial M&A in 2025/2026 (Charter with Cox – announcement from early May here, and AT&T with the Lumen Mass Markets acquisition – announced last week – announcement here). Fourteen billion dollars separate AT&T and Verizon (#2 and #3 of the Telco Top Five), but the gap between Verizon and Comcast’s values has grown to $54 billion. To get some initial thoughts on the benefits of a Charter/ Cox tie-up, see last week’s Interim Brief here.
T-Mobile had a leading announcement on Friday when they offered early redemption terms on $2.1 billion in US Cellular notes (announcement here). We take this as a sign that the transaction will be approved and close in the next 2-4 weeks. Wednesday represents the one-year anniversary of the original acquisition announcement.
Three long-form videos
Like many of you, we have been spending time trying to understand the implications of Artificial Intelligence (AI) on the telecom industry and society as a whole. Specifically, we have been identifying the building blocks of AI: content/context/consent, algorithms, interfaces, and applications. While we can get caught up in a lot of minutiae, it’s important to understand that it takes volumes of information to feed a large language model (LLM) and the best LLMs will likely be (semi-) proprietary.
With that preamble, we decided to go with three long-form videos (most of these have summarized versions available on YouTube):
- Jensen Huang’s opening keynote at the NVIDIA GTC 2025 Conference held last March (here). If you are new to AI and want to understand the high dependency on chipsets and computing hardware (and operating system software), this is a perfect video to absorb. After watching this video, we now understand why the market places a value of $3.2 trillion on the stock (and will be parsing every word during this week’s earnings call). It also highlights the importance of high-performing hardware to enable the promise of AI.
- The Google I/O opening Keynote held last week (here). This is must-watch for all AI programmers, not because of Google’s Gemini LLM, but because they are actively building all Google apps around AI. We could write ten Briefs on the 5+ hours of videos we watched related to I/O. If you don’t leave this session with a long list of research items for your company, something is wrong.
- Dr. Eric Schmidt’s TED Talk on the “Underhyped” AI (here).This is the shortest of the three long-form videos and should be viewed after watching (some part of) the first two. We really liked when Dr. Schmidt talked about the role of AI in defense (an area far from this newsletter’s focus).
From these (and several other) videos, we come away with the following observations:
- AI has high transformation potential, but both hardware and software must evolve at equal paces.
- AI’s impact will differ by industry. The opportunities for health care are going to be far different than how AI will impact state DMVs. Big for both, but different.
- Content is (still the) king. Its cousin, consent, is vital to building trust.
- Even if its adoption is slower than analysts/ futurists expect, AI will materially impact business productivity for the next 10-20 years.
One final recommendation (that is not on topic): If you have not watched the documentary General Magic about the Apple spinoff, and you need to be inspired about technological innovation, we would suggest you watch for free (Tubi or Roku Channel) or for $2.99 on Amazon Prime.
That’s it for this week. Second quarter insights will be the topic of the next two Briefs. Until then, if you have friends who would like to be on the email distribution, please have them sign up directly through the website.
Finally – Go Royals and Sporting KC!
Important disclosure: The opinions expressed in The Sunday Brief are those of Jim Patterson and Patterson Advisory Group, LLC, and do not reflect those of CellSite Solutions, LLC, or Fort Point Capital.
