What happened

Shares of Verizon (VZ 1.54%) were lagging the market once again in the first half of the year as a combination of underwhelming quarterly results, rising interest rates that make short-term bond yields more competitive, and a surge in tech stocks from interest in artificial intelligence all left the telecom stock in the dust.

According to data from S&P Global Market Intelligence, the stock fell 6% in the first six months of the year, significantly underperforming the S&P 500, which gained 15.9%.

As you can see from the chart below, the stock headed steadily lower over most of the first half of the year.

VZ Chart

VZ data by YCharts.

So what

Verizon started off the year with gains in January, benefiting from the broad market's recovery and giving positive commentary about fourth-quarter subscriber additions early in the month.

The stock was essentially flat in response to its fourth-quarter earnings report as the company matched estimates on the top and bottom lines. Overall revenue rose 3.5% to $35.3 billion, and wireless service revenue was up 5.9%. Adjusted earnings per share fell from $1.33 to $1.19. 

Full-year guidance was also weaker than expected as the company called for adjusted earnings per share of $4.55 to $4.85, which was below estimates at $4.99. It also said wireless service revenue would grow 2.5% to 4.5%.

At the beginning of March, the company said that chief financial officer Matt Ellis would be leaving the company in the second quarter to pursue other interests, and the company reaffirmed its 2023 guidance at an industry conference with Ellis saying that the consumer is in "good shape overall."

The stock fell 4% on April 20 after rival T-Mobile announced a new wireless unlimited data plan called Go5G, which one analyst said could be a negative for both Verizon and AT&T.

In its first-quarter earnings report a few days later, the company missed estimates as revenue fell 1.9% to $32.9 billion, below the consensus at $33.57 billion, due to a decline in equipment revenue and revenue at its Verizon Business unit.

The company also lost 127,000 monthly paying customers and reported adjusted earnings per share of $1.20, which matched estimates but was below the consensus at $1.35.

In May, the stock pulled back on reports that Amazon could enter the telecom market, though the company later said it had no plans to do so.

Now what

Verizon's business isn't in deep trouble, but growth has been sluggish in the telecom industry, and investors should expect it to remain that way. 

Its juicy 7.4% dividend yield looks safe, but if this is the start of a new bull market, investors can likely find a better place to put their cash to good use.