T-Mobile Emerges as Hedge Fund Favorite With Stock on a Tear

With traders fixated this week on wild swings in meme stocks like Bed Bath & Beyond and mixed signals from Federal Reserve officials, it was easy to miss under piles of regulatory disclosures that hedge funds have been quietly buying T-Mobile US Inc.

The mobile phone carrier was the biggest position at Steven Cohen’s Point72 Asset Management at the end of the second quarter. In total, at least 25 hedge funds had 5% or more of their equity investments in the stock, according to a Bloomberg analysis of quarterly 13F filings. At Tekne Capital Management, the position was 18% of its book.

Anyone paying attention has watched T-Mobile steadily rise up the leaderboard of the Nasdaq 100 in a year in which technology and communications stalwarts have been pummeled amid soaring interest rates and slowing economic growth. The stock has gained 26%, far outpacing the performance of broad markets. The Nasdaq 100 is down 19% so far this year, while the S&P 500 is down 11%.

T-Mobile is benefiting from a banner year for mobile phone subscribers attracted by its cut-rate service plans at a time when high inflation is taking a bite out of consumers’ paychecks. After years of lagging behind peers like Verizon Communications Inc. in network quality, T-Mobile is also gaining from investments in spectrum and its 2020 acquisition of Sprint, according to analysts.

“T-Mobile has gained a 5G network advantage, and is no longer just a value leader but can compete and win on network quality as well,” said Ric Prentiss, an analyst at Raymond James.