Summary

• Fidelity Select Communication Services Portfolio returned -7.53% in the first quarter, trailing the -6.79% result of the MSCI U.S. IMI Communication Services 25/50 (Media Linked) Index.
• Market leaders Meta Platforms and Alphabet struggled during the quarter due to investor concern regarding heavy spending on artificial intelligence, impacting the interactive media & services industry.
• An average underweight in Verizon Communications was the biggest individual relative detractor after the company reported an increase in subscribers for the final quarter of 2025.
• Non-index exposure to Western Digital Corporation added the most value, led by better-than-expected financial results supported by robust spending by hyperscalers and favorable supply-and-demand dynamics.
• Fidelity shifted the portfolio to an overweight in the cable & satellite segment, seeing growth opportunities in the satellite segment represented by EchoStar Corporation.

Market Review

The communication services sector returned -6.79% in the first quarter, according to the MSCI U.S. IMI Communication Services 25/50 ((Media Linked)) Index, as concern about the viability of artificial intelligence–related investments began to surface and conflict in the Middle East