The concept of “Bidenomics” has undergone expansion, now encompassing the notion of universal internet access.
During the summer, President Joe Biden unveiled a novel initiative, pledging to allocate $42 billion towards the goal of ensuring that “every person in America” is connected online by 2030.
In his White House briefing to introduce this program, President Biden emphasized that internet access is “just as important as electricity or water.”
The financial resources are earmarked for disbursement through the Broadband Equity Access and Deployment (BEAD) program, which received authorization as part of the Biden administration’s $1 trillion 2021 infrastructure package. These funds will be distributed across all 50 states, with the most populous states, California and Texas, being the largest beneficiaries. States characterized by substantial rural areas lacking connectivity, such as Virginia, Alabama, and Louisiana, will also receive substantial funding.
“It’s the biggest investment in high-speed internet ever,” President Biden declared.
As a result of this robust drive for universal internet access, several industries stand to reap rewards. Here are three prominent stocks poised for growth in the foreseeable future.
Boasting a subscriber base of 31.7 million, Comcast (NASDAQ: CMCSA) already holds the title of the largest cable broadband provider in the United States. This positions the company favorably to capitalize on the recent push for universal internet access by the Biden administration.
Comcast has already experienced positive outcomes from the 2021 Affordable Connectivity Program, a federal initiative with a $14 billion budget that has offered a monthly subsidy of $30 or more to over 19 million households, aimed at assisting with broadband expenses. Comcast, known for its nationwide dominance with Xfinity cable and internet service, emerged as one of the primary beneficiaries of this program.
Year to date, Comcast’s stock has witnessed an approximate 24% increase.
AT&T (NYSE:T) represents another potential beneficiary of the Biden administration’s drive to expand internet access.
The company currently operates the largest network of fiber-optic cables in the nation, serving 19.7 million consumer addresses, 750,000 corporate establishments, and over 3 million business customer sites across 100 metropolitan areas in the United States.
Sustaining and, even more so, expanding this network is a costly endeavor, and government subsidies could provide significant relief. During the White House press conference, Secretary of Commerce Gina Raimondo explicitly noted that a portion of the newly announced BEAD grant would be designated for “manufacturing fiber-optic cable in America.”
AT&T’s stock has experienced a decrease of approximately 23% year to date, making it an intriguing prospect for contrarian investors.
Charter Communications (NASDAQ:CHTR), with 28.9 million wired broadband customers, holds the position of the second-largest wired internet provider in the United States.
Much like Comcast, Charter reaped the benefits of government-supported funding through the Affordable Connectivity Program and stands in a robust position to leverage the newly introduced BEAD program. Additionally, the company has already allocated over $5.5 billion for enhancing speeds throughout its network in the coming years.
“We are targeting that over 85% of our footprint will be capable of an up to 5 gigabits per second service by end of year 2025,” emphasized Charter’s President of Product and Technology, Richard DiGeronimo, during an investor presentation in late 2022.
Charter’s stock trades with a price-to-earnings ratio of 15.09, and its stock price has surged nearly 32% year to date.
