Top Communication Services Stocks to Invest in the US

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Top Communication Services Stocks to Invest in the US

May 24, 2025

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Communications services companies are integral to connecting people and businesses, offering a range of vital services such as telecommunications, media, and entertainment.

Year-to-Date Performance of Communication Services Stocks

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To come up with our list of the best communication services stocks to buy now, we screened for:

Communication services stocks that are undervalued, as measured by our price/fair value metric.Stocks that earn narrow or wide Morningstar Economic Moat Ratings. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.Stocks that earn a Low, Medium, High, or Very High Morningstar Uncertainty Rating, which captures the range of potential outcomes for a company’s fair value.Read more: 5 Key Investing Lessons From Recent Market Volatility

The 12 Best Communication Services Stocks to Buy Now

These were the most undervalued communication services stocks that Morningstar’s analysts cover as of May 8, 2025.

Rogers Communications RCI Baidu BIDU Liberty Global LBTYA The Interpublic Group of Companies IPG Pinterest PINS Alphabet GOOGL/GOOG NetEase NTES Omnicom Group OMC BCE BCEComcast CMCSATencent Holdings TCEHY Cogent Communications CCOI

Here’s a little more about each of the best communication services stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of May 8, 2025.

Rogers Communications

Morningstar Price/Fair Value: 0.54Morningstar Uncertainty Rating: LowMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 5.68%Industry: Telecom Services

Telecom services firm Rogers Communications is the cheapest stock on our list of the best communication services stocks to buy. Rogers Communications is the largest wireless service provider in Canada, with its more than 11 million subscribers equating to one third of the total Canadian market. The stock is trading 46% below our fair value estimate of $47 per share.

Rogers is the leader in Canada’s wireless market, with over 30% market share, and has continued to invest heavily in improving its network. The firm has spent more than any peer on the spectrum since 2019, cementing its position as a network leader. Even as competitor Quebecor extends its push to become a national carrier, increasing competition and weighing on pricing power throughout the industry, we don’t expect Rogers to lose ground as Canada’s premier wireless provider.

We expect Rogers to face increasing competition in its wireline business from competitors BCE and Telus. Roger’s acquisition of Shaw in 2023 expanded its fixed-line business to Western Canada, where Telus has continued to invest and upgrade its fiber network. Similarly, in Roger’s core market in Ontario, BCE’s fiber investment creates another challenging landscape for Rogers. We don’t think either competitor’s assets are better, but we do think they introduce a layer of competition Rogers hasn’t previously faced. Even as heightened competition weighs on the business, we expect Rogers to continue to deliver on the profitability front. Synergies from the Shaw acquisition remain ahead, and Rogers’ focus on content cost reduction and platform digitalization should substantiate margin growth through our forecast.

Rogers continues to bolster its media unit. It owns the Toronto Blue Jays and has been increasing its stake, now at 75%, in Maple Leaf Sports & Entertainment, which owns the Maple Leafs, Raptors, Toronto FC, and other sports teams. We continue to think these assets could fetch a higher price in sale than what the market is currently giving them credit for, and a potential announcement to refocus the business to a core telecom provider would generate value for shareholders.

Samuel Siampaus, Morningstar analyst

Baidu

Morningstar Price/Fair Value: 0.56Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: WideForward Dividend Yield: NoneIndustry: Internet Content & Information

Baidu is the largest internet search engine in China with over 50% share of the search engine market in 2024 per web analytics firm, StatCounter. The firm earns a wide economic moat rating, and the shares of its stock look 44% undervalued relative to our $157 fair value estimate.

Baidu’s online advertising business accounted for 72% of Core revenue in 2023 and will be the main source of revenue in the medium term given its dominant market share for search engines, but we believe unless it can develop another industry-leading business, it could face long-term challenges for advertising dollars from growing competitors such as Tencent and ByteDance. Baidu is increasingly shifting its focus toward its cloud business and now also artificial intelligence, with its Ernie generative AI model becoming its flagship product. We believe that Baidu is an early mover and should benefit from China’s AI development, but whether Ernie will be the long-term leader will depend on execution as we believe other resource-heavy companies have the potential to catch up to Baidu if there are missteps in its generative AI development.

While Baidu is transforming its identity by investing in generative AI, cloud, and autonomous driving, commercialized success remains to be seen. There are encouraging signs of its AI cloud monetization growing to 18% of core revenue in 2023 from 12% in 2020. However, despite sharp growth, we expect Baidu to face competition in the cloud from industry leaders Alibaba, Huawei, and Tencent, which all have greater market share than Baidu. Despite a potential total addressable market for autonomous driving that is 9 times its online advertising per management, commercial success is highly uncertain as revenue remains immaterial, and mass scale adoption or time-to-market are unclear.

Its streaming video service, iQiyi, continues to be a margin drag on Baidu’s business due to a high content cost. The business constantly needs to develop or acquire new content to prevent customer churn. We’re less confident of its outlook than the Core product due to a low barrier to entry and numerous competitors. Membership has remained stagnant at 100 million subscribers for the last five quarters, and therefore, we believe long-term growth is limited.

Kai Wang, Morningstar senior analyst

Liberty Global

Morningstar Price/Fair Value: 0.62Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: NoneIndustry: Telecom Services

Next on our list of the best communication services stocks to buy is Liberty Global. Liberty Global is a holding company with interests in several telecom companies in the UK, the Netherlands, Belgium, Switzerland, Ireland, and Slovakia. The stock is trading at a 38% discount to our fair value estimate of $15 per share.

Liberty Global is a holding company that fully or partially owns interests in European telecommunications businesses, including in the UK (Virgin Media O2), the Netherlands (VodafoneZiggo), and Belgium (Telenet). The firm also owns smaller businesses in Ireland and Slovakia. Liberty is known for showing rational behavior in the markets it operates, a positive in the highly competitive telecom industry.

Liberty’s subsidiaries have historically been the main cable network owner in the countries they serve, providing the main alternative to incumbent-owned copper/fiber networks. In 2019, Liberty divested many operations in noncore geographies like Germany, Romania, Hungary, and the Czech Republic and used these proceeds to reinvest in its core geographies and repurchase shares.

During the past decade, Liberty has combined its cable businesses with mobile network operators through acquisitions or joint ventures. It expanded its breadth by offering converged fixed-mobile products, which tend to have higher retention rates. In 2016, Liberty merged its Dutch cable business Ziggo with Vodafone in a 50/50 joint venture. In 2021, it created the joint venture of Virgin Media and O2 (Telefonica) in the UK. It also acquired MNO Base in Belgium in 2016 to add mobile capabilities to its cable business.

Liberty’s corporate structure is complex. The firm is an intricate combination of subsidiaries and joint ventures, with cash flows in many currencies but consolidating results in the US dollar. To improve transparency, management spun off the Swiss Sunrise business to shareholders in November 2024. We expect to see more moves in this direction, which we believe could help investors better appreciate the value of Liberty’s assets and reduce its valuation gap. Liberty’s two most valuable businesses are Virgin Media O2 and VodafoneZiggo, which are held through joint ventures, with Liberty owning 50% of each.

Javier Correonero, Morningstar analyst

The Interpublic Group of Companies

Morningstar Price/Fair Value: 0.65Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 5.23%Industry: Advertising Agencies

Interpublic Group is among the world’s largest advertising holding companies based on annual revenue. The Interpublic Group of Companies is an affordable communication services stock, trading at a 35% discount to our fair value estimate of $39 per share. The advertising agency earns a narrow economic moat rating.

Interpublic Group is one of the global Big Five advertising holding companies along with Dentsu, Omnicom, Publicis, and WPP. As advertisers have consolidated marketing spending with fewer partners and increased demands for measurable results, the need for scale among agencies has grown in recent years, and the major holding companies have pursued smaller acquisitions to add scale and new capabilities. However, IPG’s plan to merge with Omnicom, if approved by regulators, would create the largest global ad holding company, about 30%-35% larger than rivals Publicis and WPP. Critically, the merger would combine both firms’ technology and data capabilities, enhancing both firms’ ability to provide holistic marketing solutions.

IPG has transitioned from traditional advertising into a more complete solutions provider with digital and other services, such as public relations and consulting. The firm’s 2018 acquisition of data solutions provider Acxiom was a particularly big step, helping the firm lead its peers in terms of organic revenue growth going into and out of the pandemic. IPG has fallen behind more recently, however, with high-profile client losses like Pfizer and Amazon hitting in 2024.

If IPG remains independent, we look for the firm to continue making acquisitions and investing to expand its capabilities in the digital advertising market. Clients of IPG and its peers are allocating more ad dollars toward more-targeted digital campaigns. The rise of ad-supported streaming television services, for example, will pull more ad spending from traditional broadcast and cable networks, where targeting is more difficult. We also look for IPG to continue its acquisition growth strategy to gain further traction in faster-growing international markets. Globalization of businesses in various verticals has increased demand not only for vertical-specific advertising expertise but also for experience, knowledge, and a clearer understanding of different cultures and regulations.

Michael Hodel, Morningstar director

Morningstar Price/Fair Value: 0.65Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: NoneIndustry: Internet Content & Information

Pinterest is a social-media platform with a focus on product and idea discovery. The firm earns a narrow economic moat rating, and the shares of its stock look 35% undervalued relative to our $43 fair value estimate.

We view Pinterest as a differentiated player that has carved out a niche in a crowded digital advertising market. While the firm’s user count remains markedly below its larger social-media peer Meta, we remain optimistic about the company’s ability to increase its share within digital advertising budgets by increasingly leveraging e-commerce features and ads on its platform, thus increasing ad monetization.

Pinterest’s strategy is to move more of the ad spending on its platform from brand awareness to commercial intent. Because the firm is a search and discovery platform, users often provide strong signals to advertisers about their intent to buy certain products.

With more than 500 million average monthly users spread across the globe, we see Pinterest as having the requisite scale to introduce and monetize more commercial searches on its platform.

Beyond placing ads against search items, we see Pinterest’s investments in artificial intelligence to improve ad-targeting and search results as value-accretive to the firm. With more than 1 billion posts on Pinterest saved by its users every week, Pinterest is also investing in image recognition technology that can pick out specific items within a saved pin and show users where to buy that product as it is likely part of an aesthetic that the user liked.

We don’t believe Pinterest has the scale or the capital to compete with larger digital advertising behemoths like Alphabet and Meta. However, by leveraging its investments in AI and focusing more on e-commerce, we believe Pinterest can be a credible competitor, worthy of attention from digital advertisers that are seeking to maximize their return on ad spending.

Malik Ahmed Khan, Morningstar analyst

Alphabet

Morningstar Price/Fair Value: 0.65Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideForward Dividend Yield: 0.54%Industry: Internet Content & Information

Alphabet is a holding company that wholly owns internet giant Google. Alphabet is an affordable communication services stock, trading at a 35% discount to our fair value estimate of $237 per share. The internet content company earns a wide economic moat rating.

We view Alphabet as a conglomerate of stellar businesses. With solutions ranging from advertising to cloud computing and self-driving cars, Alphabet has built itself into a true technology behemoth, generating tens of billions of dollars in free cash flow annually. While antitrust concerns around Alphabet’s core search business have made headlines, we retain our confidence in Alphabet’s overall strength and foresee the firm remaining at the forefront of a variety of verticals including search, artificial intelligence, video, and cloud computing.

Alphabet’s core strategy is to preserve its strong advertising business, with the majority of advertising revenue coming from Google Search. To that end, the firm has invested considerably over the years to improve its search capabilities, ensuring that its search engine remains deeply embedded in how hundreds of millions of users access information on the web.

We see the firm’s investments in AI as a continuation of this effort to safeguard its core product, Google Search. We believe that by leveraging generative AI, Google can not only improve its own search quality via features such as AI overviews but also improve its advertising business by augmenting its ability to target customers with relevant ads.

On the antitrust front, we don’t foresee a material deterioration in Google’s search business resulting from governmental or judicial intervention. While there is a range of possible outcomes depending on what remedial steps are imposed, we think it is likely that Google will maintain its leadership position in search and text-based advertising in the long term.

Beyond search, we have a positive outlook on Alphabet’s cloud computing platform, Google Cloud Platform. We believe increased migration of workloads to the public cloud and an uptick in the deployment and usage of AI are key growth drivers for GCP over the next five years. At the same time, we believe that as GCP scales, it will become a more important part of Alphabet’s overall business, both from a top-line and profitability perspective.

Malik Ahmed Khan, Morningstar analyst

NetEase

Morningstar Price/Fair Value: 0.67Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 2.43%Industry: Electronic Gaming & Multimedia

Founded in the late 1990s as an internet portal, NetEase has transformed into a leading force as the second-largest online game company in China. The firm earns a narrow economic moat rating, and the shares of its stock look 33% undervalued relative to our $160 fair value estimate.

NetEase holds a prominent position in the Chinese gaming market, owning some of the best-known online game titles. More importantly, most of these titles continue to generate substantial popularity. We expect NetEase’s frequent content updates for its core titles to drive consistent revenue generation. This, combined with the promising returns from recent investments in new game development, positions the company for continued free cash flow growth.

While the gaming industry is becoming more competitive, a key trend is benefiting established developers like NetEase—the growing player engagement with established franchises. Gamers are focusing their playtime on a smaller number of games, resulting in a larger revenue share for successful, long-standing franchises, including several developed by NetEase. This trend reinforces the value of NetEase’s portfolio of franchises and its ability to increase long-term player spending.

NetEase is also expanding its global reach, aiming to increase its overseas development exposure from 20% to 40%. Unlike Tencent’s mergers-and-acquisitions-focused expansion, NetEase invests earlier in the game development cycle, building studios from scratch. Furthermore, NetEase empowers its international studios with ample funding and creative autonomy, a strategy we believe is crucial given NetEase’s lack of experience in Western markets and the inherently creative nature of game development.

While gaming remains NetEase’s primary cash flow driver, its investments in other sectors, including music and education, hold long-term promise. Cloud Village, its music streaming platform, boasts over 200 million monthly active users as of 2024, solidifying its position as the second-largest music streaming service in China. Similarly, Youdao, NetEase’s online education platform, is capitalizing on the increasing demand for digital learning content in China.

Ivan Su, Morningstar senior analyst

Omnicom Group

Morningstar Price/Fair Value: 0.68Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 3.66%Industry: Advertising Agencies

Omnicom is a holding company that owns several advertising agencies and related firms. Omnicom Group is an affordable communication services stock, trading at a 32% discount to our fair value estimate of $112 per share. The advertising agency earns a narrow economic moat rating.

Omnicom is one of the five largest advertising agency holding companies globally. With well-recognized creative agencies and subholding companies such as BBDO and DDB, we expect the firm to maintain its market position. The plan to merge with Interpublic Group, if approved by regulators, would create the largest global ad holding company, about 30%-35% larger than rivals Publicis and WPP. Critically, the merger would combine both firms’ technology and data capabilities, which are becoming increasingly critical in moving beyond the traditional creative ad business to provide holistic marketing solutions.

With or without Interpublic, we suspect Omnicom will likely continue making acquisitions to expand its technologies prowess further. Omnicom’s acquisition of Flywheel in early 2024 fits this expectation. Clients are allocating more ad dollars toward targeted digital campaigns. Omnicom has made headway in providing different components of digital advertising, such as programmatic media buying and ad placement, along with data analytics and performance measurement services. Flywheel adds to Omnicom’s capabilities within the retail media segment, where brands look to promote their products directly on websites like Amazon or Target. The Flywheel relationship also helped Omnicom secure Amazon as a new client in 2024.

Going forward, the increasing utilization of first-party data and more contextual-based target advertising should increase the role of Omnicom and its peers within the advertising workflow. We suspect the firm will work to ensure it has the capabilities needed to help clients manage the complexities of ad targeting as data privacy standards and regulations evolve.

We also look to Omnicom to pick up the pace of its acquisition growth strategy to gain a larger presence in faster-growing international markets. Globalization in various industries has increased the demand for experience, knowledge, and a clear understanding of different cultures and regulations.

Michael Hodel, Morningstar director

BCE

Morningstar Price/Fair Value: 0.69Morningstar Uncertainty Rating: LowMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 11.03%Industry: Telecom Services

BCE provides wireless, broadband, television, and landline phone services in Canada. Trading 31% below our fair value estimate, BCE has an economic moat rating of narrow. We think shares of this stock are worth $32 per share.

BCE’s heavy investment in its new fiber network over the last several years has propelled the company to leadership in high-speed internet services in its core territory in eastern Canada. The firm is among the top broadband providers in the country, with 8.5 million wireline subscriptions across internet, television, and other broadband services. It has taken broadband share from Rogers and Quebecor. We expect this trend to continue, as BCE still lags in term of market penetration versus its two main competitors and the availability of further fiber network expansion opportunities.

We expect BCE’s leading position as a Big Three Canadian wireless carrier to continue, thanks to its high-quality network and national scale, but we think competitor Quebecor’s expansion plans to become the fourth national wireless provider will add intensity to the competitive landscape. We still expect BCE to add its fair share of wireless customers, but at a slower rate, due to Canada’s government’s plans to curb immigration. We think increased competition will primarily weigh on the firm’s pricing power, limiting its ability to raise prices and expand its wireless margins.

BCE also has a high-quality media unit. Its Crave on-demand video service provides a range of content from HBO, Showtime, and Starz. BCE also owns Canada’s top broadcast network and sports channel. We expect BCE’s media segment to increase penetration across Canada and to drive revenue for the firm.

The firm plans to acquire Ziply, a fiber operator in the US Pacific Northwest, to expand its telecom business across the border. We think Ziply will provide a favorable growth engine, as the US fiber market is far less penetrated than Canada and offers ample room to add customers. However, this US expansion will be expensive, as the CAD 5 billion acquisition will be followed by significant capital investment to drive growth. We doubt this acquisition will provide meaningful benefits to the core Canadian business and expect returns on investment will be modest.

Samuel Siampaus, Morningstar analyst

Comcast

Morningstar Price/Fair Value: 0.70Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 3.86%Industry: Telecom Services

Comcast is made up of three parts. The firm earns a narrow economic moat rating, and the shares of its stock look 30% undervalued relative to our $49 fair value estimate.

Comcast’s core cable business enjoys significant competitive advantages and should deliver strong cash flow for the foreseeable future. However, fixed-wireless offerings from competitors have proved to be viable broadband alternatives, and competing fiber networks continue to expand at a steady clip, which will chip away at the returns on capital Comcast earns. We’re also skeptical that the media business will return to the level of profitability it has enjoyed in the past.

Comcast’s cable business has steadily gained broadband market share over the past 20 years as high-quality internet access has become a staple utility. With a network that can be upgraded at modest incremental cost, Comcast will remain the dominant broadband provider in many parts of the country and compete well in areas where the phone companies are building fiber, in our view. We also expect capacity limitations will ultimately constrain the number of broadband customers wireless carriers can serve. Still, with wireless and fiber networks skimming off customers, Comcast likely won’t produce much growth in the coming years, relying on a rational competitive environment to allow for steady price increases to lift the top line.

The effort to build the Peacock service to replace lost traditional TV revenue has developed slowly, creating uncertainty around the long-term prospects for the business. Profitability in the television business has dropped sharply as Peacock losses mount and the traditional networks lose subscribers. Comcast’s media business is locked into hefty content agreements, including the recent NBA deal, without a clear path to revenue stability.

On the positive side, we like that the firm is aggressively expanding its parks business, creating experiences that leverage and support key content franchises. Comcast’s plan to spin off most of its cable networks shouldn’t detract from its ability to build on existing franchises or create new ones, but it will take a source of cash flow away. We aren’t clear on what Comcast plans to do with the spinoff, but we suspect it will use the entity to consolidate other similar assets.

Michael Hodel, Morningstar director

Tencent Holdings

Morningstar Price/Fair Value: 0.71Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: WideForward Dividend Yield: 0.90%Industry: Internet Content & Information

Tencent holds a prominent position in China‘s internet sector, with a diverse portfolio of products and services used daily by a significant portion of the population. The firm earns a wide economic moat rating, and the shares of its stock look 29% undervalued relative to our $91 fair value estimate.

Over the past decade, Tencent has capitalized on the mobile gaming boom, owning hugely popular titles such as Honor of Kings and PUBG Mobile. Games remain its primary monetization engine, generating an estimated 60% of operating income. Leveraging unparalleled user data access and substantial financial resources, Tencent is well-positioned to continue developing innovative, high-quality, and enduring franchises.

Beyond gaming, Tencent’s empire encompasses advertising, payments, cloud computing, music streaming, and various other ventures. We see significant untapped value within the WeChat network as monetization increases through advertising.

WeChat’s dominance as China’s largest app makes it a prime marketing channel. Ample advertising revenue opportunities lie ahead, driven by increased user engagement on Tencent platforms, which leads to greater ad inventory, higher ad loads, and improved ad-targeting efficiency.

While games and advertising will remain Tencent’s core revenue drivers, its leading position in financial technology, cloud computing, and enterprise software offers significant long-term value creation potential. Given China’s economic scale and widespread digital adoption, Tencent is poised to benefit from these opportunities by transforming its services into substantial revenue streams.

Tencent’s prowess as an investment powerhouse has fueled its expansion through strategic equity investments. By integrating investees’ services into WeChat and other platforms, Tencent reduces customer acquisition costs and accelerates growth. This strategy has proven highly successful, transforming many small, loss-making companies into profitable listed entities. However, as Tencent matures and the Chinese economy evolves, we anticipate fewer material investment opportunities of this scale in the future.

Ivan Su, Morningstar senior analyst

Cogent Communications

Morningstar Price/Fair Value: 0.71Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: NarrowForward Dividend Yield: 8.19%Industry: Telecom Services

Telecom services firm Cogent Communications rounds out our list of best communication services stocks to buy. Cogent carries over one fifth of the world’s internet traffic over its network and is a broadband provider for businesses. The stock is 29% undervalued relative to our fair value estimate of $69 per share.

Cogent focuses on providing telecom services to enterprises in dense urban areas and carrying internet traffic for its “netcentric” customers who deal with massive amounts of data, such as content delivery firms, media providers, and other ISPs. This narrow focus has served the firm well—it carries nearly one fourth of the world’s internet traffic—but the recent Sprint transaction has created challenges.

Cogent’s network of nearly 30,000 intracity and 80,000 intercity fiber route miles is substantial, but more impressive is how it built this network. Rather than laying its own fiber—a capital-intensive endeavor—Cogent has opportunistically acquired these assets. Cogent made its mark following the telecom bubble 25 years ago, acquiring 13 different distressed companies at steep discounts. With an acquired network as the baseline, Cogent has pursued fiber leases, or IRUs, to cost-efficiently expand its network.

Echoing its history of savvy dealing, Cogent’s complex acquisition of Sprint’s fixed-line business in 2023 further expands its network and opens the door for new revenue opportunities. T-Mobile, which acquired Sprint for its wireless business, is paying Cogent $700 million to take the underutilized fixed-line network and the associated cash-burning business. While Cogent continues to work through the most unattractive contracts, which will weigh on profitability in the near term, we think the deal will benefit the firm over the long term. Cogent acquired nearly 20,000 long-haul fiber miles. In the era of artificial intelligence, where hyperscalers are rushing to secure data center capacity and connectivity, Cogent’s network is positioned to offer high-capacity wavelength and dark fiber services.

Connectivity is becoming increasingly important. Whether it’s serving enterprises through its nearly 1,900 connected office buildings or netcentric customers through its vast intercity network, Cogent, through its low-cost network, is well positioned to succeed as a low-cost alternative to other carriers.

Samuel Siampaus, Morningstar analyst