All Systems Go: AST SpaceMobile (ASTS) Stock Throttles Up En Route to the Stars

AST SpaceMobile stock continues meteoric rise as company aims to revolutionize global connectivity with space-based broadband.

Ryan Troup August 21, 2024Last Updated: August 21, 2024

3 minutes read

Source: AST SpaceMobile Press Release

AST SpaceMobile (NASDAQ: ASTS) stock continued its meteoric ascent today, as the trailblazing telecommunications company moves closer to potentially the most transformative event in its history. Set to launch its first five commercial satellites in September 2024, the company aims to bring global mobile broadband coverage directly to everyday smartphones. This ambitious endeavor has sparked considerable excitement among investors, as AST positions itself to disrupt the communications landscape through space-based cellular networks.

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Expanding Mobile Coverage Globally

AST SpaceMobile’s mission is bold: to provide mobile phone users with reliable service, even in the most remote regions of the world. The company plans to launch satellites into low Earth orbit (LEO) that will connect with mobile phones, bypassing the need for traditional cell towers. With around 400 million people lacking mobile internet coverage globally, AST aims to bridge this gap, especially in regions with limited connectivity.

However, AST’s primary focus isn’t just on the underserved market. According to the company, 5.6 billion people with mobile phones regularly lose coverage while traveling to remote areas. This untapped opportunity for expanded connectivity is at the heart of AST’s business model. Through partnerships with major mobile network operators (MNOs), including AT&T (NYSE: T), Verizon (NYSE: VZ), and Vodafone (NASDAQ: VOD), AST will offer mobile users the ability to seamlessly switch to satellite-based coverage when traditional signals are weak or unavailable.

Abel Avellan, CEO of AST SpaceMobile, commented:

“Our mission to eliminate dead zones is not just about connectivity, but empowerment. We envision a world where everyone, everywhere can stay connected.”

A Technological Breakthrough

The launch of the five “BlueBird” satellites in September will be a significant milestone. Each of these satellites is equipped with solar arrays spanning 64 square meters and will be the largest communication array ever deployed commercially in space. These satellites will enable non-continuous nationwide coverage in the U.S., marking a key step in AST’s long-term plan to establish a global network of 45 to 60 satellites for seamless global service.

AST’s next wave of satellites, slated for launch in early 2025, promises even greater capabilities. These Block 2 BlueBirds will be equipped with proprietary chips developed by AST, increasing data processing capacity tenfold. As AST scales its satellite production at its Texas manufacturing facility, the company expects to improve efficiency and reduce costs through a 95% vertical integration of satellite components and subsystems.

A High-Risk, High-Reward Investment

While AST SpaceMobile stock has skyrocketed by over 500% in 2024, the company’s financial performance has yet to match its market value. In its latest earnings report, AST posted a mere $900,000 in revenue, alongside a significant net loss of $72.6 million.

Nevertheless, investors remain optimistic, with analysts like Scotiabank’s Andres Coello raising price targets on AST stock, citing the firm’s groundbreaking potential in the space-based communication sector.

On August 16, 2024, Coello raised his price target on ASTS from $21.10 to $28, while maintaining his Outperform rating on the stock.

Commenting on AST SpaceMobile stock, Coello, stated:

“AST SpaceMobile offers a unique opportunity for investors willing to accept the risks associated with a company still in its early stages. With its upcoming satellite launches, AST has the potential to become a dominant player in the global telecommunications market.”

Looking Ahead

The next few months will be pivotal for AST. The launch of the initial satellites in September will serve as a key indicator of the company’s technological viability and market readiness. By the first half of 2025, AST hopes to generate significant revenue from its partnerships with major MNOs, including AT&T and Verizon, through a revenue-sharing model.

However, regulatory hurdles remain. While AST has secured initial approval from the Federal Communications Commission (FCC) for its first five satellites, additional licenses are required to fully operate its space-based services in the U.S. These regulatory challenges, coupled with the unpredictability of space launches, highlight the risks that AST faces.

If successful, AST SpaceMobile could not only revolutionize the telecommunications industry but also reshape how the world connects—offering an unprecedented level of global coverage for mobile users everywhere. Investors, while cautious, continue to bet on the promise of this groundbreaking technology.