For years, telecom stocks have been the market’s steady, dividend-paying and largely sidelined wallflowers while Big Tech stole the spotlight.
But this week, telecom may be stealing the spotlight, at least for a while. A surprise gain in mobile subscribers in the first quarter from Verizon Communications Inc (NYSE:VZ) and a sharp rally in Qualcomm Inc (NASDAQ:QCOM) are converging into something more interesting: a potential revival in telecom-focused ETFs, with a fresh AI twist.
• Verizon Communications stock is among today’s top performers. Why is VZ stock surging?
A Rare Spark From Telecom’s Old Guard
Verizon added 55,000 postpaid phone subscribers in the first quarter, defying expectations of a steep loss and marking its first first-quarter subscriber gain since 2013.
The improvement wasn’t just cosmetic. Verizon also raised its full-year adjusted EPS guidance to $4.95–$4.99, ahead of estimates, suggesting that cost cuts and restructuring under CEO Dan Schulman are beginning to take hold.
For ETFs, this matters more than a one-day stock pop.
Funds such as Vanguard Communication Services Index Fund ETF (NYSE:VOX) and State Street Communication Services Select Sector SPDR ETF (NYSE:XLC) have long carried telecom exposure as their defensive backbone. Verizon, along with peers such as AT&T Inc (NYSE:T), typically anchors the income side of these portfolios.
When a heavyweight such as Verizon shows signs of stabilizing, it reduces downside risk for the entire telecom sleeve inside these ETFs, effectively putting a floor under their defensive component.
Then Comes Qualcomm — And The AI Wildcard
If Verizon represents stability, Qualcomm is injecting something telecom has been missing: growth.
Shares of the chipmaker surged more than 11% on Monday, before retreating, after reports that it could be working with AI players like OpenAI and Taiwan’s MediaTek on next-generation smartphone processors, with production expected later this decade. This implies that AI may trigger a new global smartphone upgrade cycle.
That has ripple effects across the ecosystem:
- More advanced chips (Qualcomm’s domain)
- Higher device replacement rates
- Increased data usage and network demand (telecom carriers benefit)
In other words, the same AI narrative driving semiconductor stocks could quietly flow into telecom infrastructure and services.
Where ETFs Come In: A Hidden “Barbell” Trade
Communication services ETFs are as of now no longer just about telecom. After sector reshuffling a few years ago, funds such as XLC and VOX now bundle telecom carriers like Verizon and AT&T, with internet platforms, including Alphabet Inc (NASDAQ:GOOGL)(NASDAQ:GOOG) and Meta Platforms Inc (NASDAQ:META).
The result is a barbell structure:
- One side offers defensive yield and stability
- The other delivers growth tied to digital ads, platforms, and increasingly, AI
That dual exposure is starting to look more attractive in the current market. If telecom stabilizes while AI spending remains strong, these ETFs can participate in both sides of the trade — without being fully dependent on high-valuation tech stocks.
The Extended Play: Semiconductors and Beyond
For investors leaning more aggressively into the AI-mobile convergence, semiconductor ETFs including iShares Semiconductor ETF (NASDAQ:SOXX) and VanEck Semiconductor ETF (NASDAQ:SMH) offer a more direct route.
While they don’t hold telecom carriers, they stand to benefit from the same underlying theme, that is AI-powered devices driving hardware demand, which in turn fuels network usage.
Bottom Line
Telecom ETFs aren’t suddenly becoming high-growth trades, but they are evolving.
Verizon’s turnaround suggests the industry may now be getting back on track, while Qualcomm’s AI-driven momentum signals telecom will soon evolve to become an enabler for next-generation intelligent devices.
For investors, that shift matters. It turns telecom ETFs from sleepy income plays into quiet participants in the AI trade, and possibly one of the market’s more overlooked ways to ride it.
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