Telstra Group Ltd (ASX: TLS) shares are on a roll.
The telco giant finished Tuesday at a 10-year high after a strong run following its FY26 half-year result.
Investors have been piling in. The numbers tell the story. Telstra shares are now up almost 10% year to date and around 28% over the past 12 months.
That's well ahead of the S&P/ASX 200 Index (ASX: XJO), which has gained just 5.7% over the same period.
So, can Telstra shares keep soaring?
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A standout in a shaky market
Telstra shares have quietly become one of the ASX's most reliable performers in a volatile market.
While many sectors have struggled with uncertainty, Telstra has pushed higher. That comes down to one key factor: resilience.
Telecommunications isn't optional. Mobile and broadband services are essential. Whether the economy is booming or slowing, demand stays relatively steady.
That gives Telstra a stable earnings base. Investors value that consistency, especially when markets get choppy.
Strong position, steady growth
Telstra's dominance is another major strength.
It remains the largest telecom provider in Australia, with a premium network and a strong brand. Continued investment in infrastructure helps it maintain that edge.
This leadership position allows Telstra to hold pricing power and defend market share, even in a competitive landscape.
And then there's the dividend
Income investors are always paying attention to Telstra shares. The telco offers fully franked dividends and has been growing them. Last month, it lifted its FY26 interim dividend by 10.5% to 10.5 cents per share.
If that trend continues, Telstra could deliver a fourth straight year of dividend growth.
At current prices, the stock offers a yield of around 4%. That's a solid return in today's market, especially from a defensive business.
Fierce competition, ongoing cost
Of course, it's not all upside.
Competition remains fierce. Rivals are constantly pushing on pricing and trying to win customers. That can pressure margins.
Telstra also needs to keep spending. Maintaining a leading network requires ongoing capital expenditure. That's a necessary cost, but it can weigh on free cash flow.
Then there's valuation of Telstra shares.
After a strong run — up over 28% to $5.34 over the past year — the easy gains may already be behind it. Investors could become more cautious at higher price levels.
What next for Telstra shares?
Telstra has proven it can perform in tough conditions. Its combination of resilient earnings, market leadership, and growing dividends makes it a compelling defensive play.
But after hitting a 10-year high, expectations around Telstra shares are rising.
From here, further gains may be more measured. Continued earnings growth and dividend increases will be key to sustaining momentum.
The bottom line
Telstra shares have been a standout performer, delivering strong returns while the broader market has been more subdued.
The business remains solid. The dividend story is appealing. And the demand for its services isn't going anywhere.
But after such a strong rally, investors should expect a steadier climb — not another sprint.
