Should I Take Profit on My AT&T Stock That’s Up 45% or Keep Holding?

It’s hard to believe that shares of hard-hit telecom firm AT&T (NYSE:T | T Price Prediction) are leading this market. With Trump tariffs rattling markets and growing respect for the low-beta, high-yield value trade, the stage certainly seems set for AT&T to continue to gain, even if all else heads lower. It’s not just the increased cautiousness on the part of investors that’s to thank for AT&T stock’s unexpected surge.

The company has actually made a great deal of progress in the past year, as prior efforts to focus on its core business finally worked their way into the stock. As things look up for the wireless business while free cash flows continue to swell, I think it’s time to view AT&T under a new light. And while it’s only prudent to think about taking gains where there are gains to be had in today’s rainy market, I’d be in no rush to hit the sell button. Of course, for investors short on cash, trimming a bit off the top of an AT&T position could make sense. Either way, I view shares as still incredibly cheap, with room to run, even without help from the broad S&P 500.

This Reddit user’s sitting on a fat 45% gain on their T stock. They’re wondering if it’s worth holding.

In a recent Reddit post, a user asked the r/dividends community if it’s time to hold or sell a position that’s now up 45%. With a still bountiful 4.2% dividend yield and a relatively muted 18.0 times trailing price-to-earnings (P/E) multiple, I see few reasons to throw in the towel on such a position, especially now that its transformation is in full swing. Though the Reddit user didn’t bring up the idea of buying more, I do think that adding to a position could prove wise. The dividend is still bountiful and shares are far from expensive, at least in my view.

Has the bar been raised following management’s expectations for strong free cash flow in the first quarter? Sure, the stakes are a bit higher following the guide. But with CEO John Stankey calling for more strength, the risks of missing out on further longer-term upside from here, I believe, are significant.

In any case, even a high-quality defensive and one of the bluest blue chips around can suffer a correction. For a stock as overbought as AT&T, there’s a risk of a reversal, especially if tariff fears are unexpectedly put to rest in the near term.

AT&T stock is getting overbought. Some profit-taking could make sense if you’re confident you’ll be able to get back in.

If Trump rolls back on tariffs (a highly unlikely scenario), we could see a rush back to risk assets (think high-multiple growth stocks that have sold off the most in the past month), and AT&T shares could be sent to the penalty box. It will be an unfair call, to say the least. Either way, such a reverse rotation (back to growth from value) is always a possibility that should be taken into consideration.

For most investors who are overexposed to tariff risks, I’d argue sticking with AT&T shares could be an important portfolio stabilizer as China looks to respond to the latest Trump threat of slapping on an additional 50% tariff. The 0.59 beta suggests shares are less likely to follow the broad markets south on any given day. Given the stock’s resilience through the Trump correction, perhaps staying the course could be a wise move, especially for income-focused investors who seek safe, sound, and growing dividends.