Sometimes it doesn't take much to move a Dow Jones (^DJI 1.21%) stock with a $175 billion market cap. Today's second- biggest Dow gainer (as of 2 p.m. EDT) is AT&T (T 0.94%), rising 2.7% on nothing but an analyst note.

Representatives from well-respected analyst house Credit Suisse sat down with AT&T CFO John Stephens this week, and came away impressed. The firm tacked a buy rating and a $37 price target on AT&T shares. That target is about 12% ahead of AT&T's closing price last night.

The telecom's stock has been battered lately, due to strong competition from Sprint (S) and T-Mobile (TMUS 0.03%). The two smaller carriers are making waves with new leadership and innovative strategies. T-Mobile is actually stealing customers from AT&T and fellow megacarrier Verizon (VZ 1.23%), while Sprint backer Masayoshi Son sends signals of an upcoming price war.

Image source: AT&T.

But Stephens told the Credit Suisse analyst team to stop worrying about these niggling challengers. "Recent competitive activity is similar to what they've seen in the past, indicating management feels the market remains rational," according to the firm's notes on AT&T. In Stephens' view, network quality matters more than pricing advantages, which means that AT&T and Verizon should be able to fend off smaller rivals and their less impressive radio spectrum portfolios -- without engaging in an all-out price war.

Personally, I'm not convinced that Stephens' logic is correct. It's true that network quality matters, and that AT&T and Verizon hold a spectrum-based advantage there. But pricing is important, too, and every AT&T customer has a pain threshold where a less impressive network could gain their business with a large enough discount.

If Sprint is allowed to acquire T-Mobile and create a third carrier with scale similar to AT&T and Verizon, we'll see where that pain threshold sits. If not, AT&T will be able to maintain high prices while bragging about its fast and reliable network. Rarely does one potential merger hold this much power over an entire industry.