The communications sector is broadly defined these days, encompassing everything from century-old legacy media companies to internet stocks. A communication services stock is a share in a company that facilitates the distribution of information and entertainment on a one-to-many or one-to-one basis.
Information technology companies use computers and software to help businesses and individuals stay connected. Telecommunications companies provide the infrastructure and services for distributing information. Television broadcast networks, broadband internet, and mobile wireless networks are also parts of the communications sector.
As we grow increasingly connected (and physically apart), the ability to send and receive information over distances becomes increasingly important. The communications sector will continue to produce important and valuable companies.
Best communications stocks in 2025
Best communications stocks in 2025
Here are five of the better stocks that are communicating with investors.
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| T-Mobile US (NASDAQ:TMUS) | $291 billion | 1.27% | Wireless Telecommunication Services |
| Comcast (NASDAQ:CMCSA) | $123 billion | 3.84% | Media |
| Netflix (NASDAQ:NFLX) | $516 billion | 0.00% | Entertainment |
| Alphabet (NASDAQ:GOOG) | $2.4 trillion | 0.40% | Interactive Media and Services |
| Meta Platforms (NASDAQ:META) | $1.9 trillion | 0.27% | Interactive Media and Services |
1. T-Mobile
T-Mobile (TMUS -0.38%) is a leading wireless phone and internet service provider in the U.S. The company found itself in an advantageous position following its acquisition of Sprint in 2020, which provided it with valuable midband radio spectrum.
The carrier has deployed that spectrum quickly, building out the biggest 5G network in the U.S., and its coverage is well ahead of that of its biggest competitors. Going forward, T-Mobile should be able to attract customers based on the strength of its brand and service instead of relying on heavy promotions as it did in the previous decade. That's seen in recent financial results, where average revenue per user increased substantially from earlier in the decade.
T-Mobile also offers home internet service in markets where its mobile network capacity exceeds demand. As part of its merger with Sprint, it committed to covering 90% of rural households with home internet over 5G. That’s a sizable opportunity for the company since most rural areas have limited options for broadband internet. It’s also having success luring urban and suburban customers away from cable internet service.
2. Comcast
Comcast (CMCSA 0.74%) is the largest cable television and internet service provider in the U.S. While its subscriber base is shrinking for both video and broadband internet, steady price increases and low costs make it very profitable. Its cable network is easy to maintain, and it can upgrade service with low incremental costs.
In 2018, the company acquired a majority stake in Sky, a leading pay TV operator in the U.K. and other European countries. It also operates a media company that produces sports, news, and entertainment television for its European audience.
Comcast’s NBCUniversal is one of the biggest media companies in the world. It includes global film and television productions, as well as a broad portfolio of U.S. cable and broadcast television networks. NBCUniversal also operates Peacock, a streaming service that gives it exposure to the direct-to-consumer media market.
Comcast plans to spin off NBCUniversal's cable TV networks, but retain the film and television studios, broadcast networks, theme parks, and streaming service.
Comcast is building a wireless phone business to offset losses in the cable business. So far, it's seen good traction by bundling subscribers, and now counts more than 8.5 million subscribers.
3. Netflix
Netflix (NFLX -0.71%) has grown to become one of the most important media companies in the world over the past 15 years. Originally a DVD rental service, it pivoted to streaming video in the late 2000s, distributing licensed content to its subscribers. Now the company spends almost $20 billion annually on both licensed and original content for more than 300 million global subscribers.
Netflix is a beneficiary of the shift from pay TV to streaming entertainment. As the market leader in the space, it has the capital to invest in more content than its competitors and take more risks with its budget. As a result, it produces some of the best and most popular shows on television.
The company cracked down on password sharing and introduced a new ad-supported tier in 2023. The combination led to strong subscriber growth and expanded Netflix's reach. The ad-supported tier opens the door for substantial increases in revenue per subscriber without having to raise prices for consumers.
4. Alphabet
The core of Alphabet (GOOG 0.17%)(GOOGL 0.18%) is Google, which encompasses its namesake leading internet search engine, YouTube, Gmail, Android, and more. Google’s services are used by billions of people around the world, making it integral to how we communicate in modern life.
Google’s business is primarily supported by advertising. Its search engine is able to serve highly targeted ads based on search terms. User data collected from other Google products, such as YouTube, Gmail, and Maps, helps improve its targeting. The sheer number of people using Google’s services makes it extremely attractive to advertisers looking to reach a broad audience, but its targeting capabilities make it suitable for any advertiser.
Google is also the home of Google Cloud, one of the leading cloud computing platforms. It has seen strong adoption of artificial intelligence (AI) services for developers, leading to accelerated growth. The cloud division only became profitable recently and still accounts for a small percentage of Alphabet's overall operating profits, but it's growing fast.
5. Meta Platforms
Meta Platforms (META -1.19%) changed the way we connect with friends and acquaintances with Facebook, and it has built Instagram into much more than just a photo-sharing app. It also counts billions of users across its messaging apps -- WhatsApp and Messenger. Meta’s products are the primary way some people communicate with others today.
The vast majority of Meta’s revenue comes from digital advertising on Facebook and Instagram. Its trove of user data develops accurate user profiles, and its AI algorithms serve up the right ad at the right time to the right person for maximum effectiveness. As a result, its ads earn a premium price from marketers compared to other social media platforms.
Meta is investing heavily in artificial intelligence -- not only for its all-important recommendation algorithm, but also for opening the door to new products. Its Meta AI chatbot is one of the most widely used in the world. It's working to develop a product for businesses to use AI agents for customer service and sales on its messaging apps as well.
Additionally, Meta is working to develop key technologies and platforms for the metaverse, the next iteration of the internet involving virtual and augmented reality. Besides changing its name to sharpen its focus, the company has also started breaking out results for its Reality Labs segment, which is currently reporting billions in annual operating losses.
CEO Mark Zuckerberg views the metaverse as an extended reality where people can work, play, and stay connected with friends and acquaintances. Owning the primary virtual reality platform for accessing the metaverse could prove extremely beneficial for the digital advertising company.
Why invest?
Why invest in communication services stocks?
The need for communication companies is only growing as we become increasingly distanced. Not only are we more mobile than ever with the ability to quickly move from city to city around the world, but trends like remote work also rely heavily on communication capabilities for enterprises.
The sector is incredibly diverse. It ranges from growth stocks with the potential for market-beating returns to value stocks paying lofty dividend yields. There's something for almost any type of investor. The key, however, is making sure you buy companies with strong competitive advantages that they can maintain for the foreseeable future. As communication needs continue to expand, those companies are the ones that stand to benefit.
Analyzing these stocks
How to analyze communications stocks
The communications sector is broad and encompasses many different fields. It’s generally best to compare communications companies that mainly operate in the same industries or that are at similar stages of growth.
- Compare a company's user base to its competitors. Is it larger or growing faster?
- Use revenue per user to compare similar businesses as a signal of competitive moats.
- Dividend yield is an important factor to consider for many communications stocks.
- Investors should also pay attention to cash flow.
Each industry within communications has an area of spending that should produce significant returns over time.
- Telecommunications companies should produce strong returns on their capital expenditures.
- Information technology companies should produce strong returns on their research and development (R&D) spending.
- Media companies should produce strong returns on their content expenses.
Related investing topics
Looking forward
The communications sector is poised to grow
The amount of data moving over long distances is growing every year. Whether it’s a simple text message on a mobile device, a film streamed over the internet, or important classified business communications, internet connectivity and 5G networks will only increase in importance, along with platforms that deliver information. Buying strong companies across the communications sector should produce good returns for investors as this trend continues.
Communication Services Stocks FAQ
Are communication service stocks a good buy now?
The communication services sector is broad and diverse. Some individual companies could be good purchases right now; others might not be. Overall, there's a growing need for communication services, and that trend isn't slowing down. Finding individual companies with competitive advantages and strong balance sheets should produce strong returns over the long run.
What are the communication service stocks with highest dividends?
The individual companies in the communication sector with the highest dividend is constantly changing. That said, many telecom companies consistently sport high dividends.
Why are communication stocks falling?
Communication stocks may be falling for any number of reasons. A stock price will decline when investors lower their expectations for future earnings. The specific industry could be facing regulatory pressure or macroeconomic headwinds. Infrastructure costs for providing their service may be rising faster than prices. Or the industry may be facing a structural challenge affecting sales or expenses.
What are the risks of investing in communication stocks?
Communication stocks face regulatory and political pressure, which could hurt operations. New technology can make a company's product obsolete if it doesn't adapt with the times. Macroeconomic factors can reduce consumer spending and advertising sales.
