My research suggests that AST SpaceMobile (ASTS) continues to hold a significant first-mover advantage in the race to establish direct-to-cell connectivity services. Further, AST keeps signing partnership deals with major telecom companies, and the company can benefit tremendously in the long term from the proliferation of space-based data centers to which Musk and Jeff Bezos are aspiring.
Finally, AST continues to receive lucrative contracts from Washington, and the company believes that it is well-positioned to generate nearly $1 billion of revenue in 2027.
Because of all of these points, I continue to recommend that growth investors buy ASTS stock.
A likely First-Mover Advantage Over SpaceX
AST plans to have enough satellites in orbit to provide direct-to-cell services by the “end of 2026.” According to Google’s AI Overview, it expects to launch 45 to 60 satellites this year, enabling it “to provide continuous, commercial-grade service in key markets, including the United States, Europe, and Japan.”
Conversely, SpaceX only intends “to start launching its larger, more powerful Starlink satellites,” which will upgrade its direct-to-cell offerings, “in mid 2027.” In the following six months, the firm is seeking to launch 1,200 satellites that are expected to enable “high-bandwidth applications—such as 4K streaming, low-latency gaming, and enterprise video conferencing.”
Currently, SpaceX offers “texting, emergency alerts, and limited data/voice services.” including 4G data capabilities. The firm provides voice calls through apps rather than “native cellular calling.” Video calls have been tested on SpaceX’s system, but their overall performance was reportedly quite poor, and PCMag recently reported that the offering can support low-resolution video calls on WhatsApp.
Meanwhile, AST has stated that its network is already capable of supporting 5G cellular broadband and 4G video calls, along with cellular voice calls, in several major geographic markets.
It appears that whereas AST is well-positioned to be ready to provide most high-quality, direct-to-cell, native services to the world’s largest markets at the end of this year, SpaceX may not reach that point until early 2028.
On the partnership front, AST is cooperating with many of the world’s largest telecom companies, including AT&T (T), Verizon (VZ), Europe’s Vodafone (VOD), Canada’s Bell, and stc, which has a major presence in the Mideast. All told, AST reports that it is partnering with “over 50 mobile network operators–serving over 50 billion subscribers combined.”
Conversely, Starlink only has a few large partners: T-Mobile (TMUS), Deutsche Telekom (DTEGY), and Canada’s Rogers (RCI)–and it seems to have many fewer collaborators overall than AST.
AST’s huge edge in this area should enable it to generate much more revenue than Starlink from direct-to-cell services in the medium-to-long term. That’s because AST’s partners will market its direct-to-cell offering to their billions of subscribers.
AST’s New Partnerships and Ability to Profit From Space-Based Data Centers
French telecom company Orange and Canadian broadband provider Telus (TU) recently announced alliances with AST SpaceMobile, further validating AST’s technology and showing that the satellite firm is continuing to expand its partnerships. Orange has 340 million subscribers while Telus has more than 21 million subscribers.
Additionally, AST President Scott Wisniewski suggested in December that AST can get a boost from space-based data centers. Specifically, he stated that “you see that with all the data center conversations in the last week or so, whether it’s communication services, noncommunication services to the U.S. government, or the next generation of commercialization of space, we’ll be in a great position to build that out.” Both Musk and Bezos have indicated that they’re interested in developing such data centers.
Lucrative Washington Deals
Last month, AST disclosed that it had received a contract from the Space Development Agency worth about $30 million. Under the deal, the company will provide ” tactical satellite communications directly between government end devices.”
And in January, the firm announced that it had obtained a contract from the Missile Defense Agency. The agreement will enable AST to provide services related to Golden Dome, the Trump administration’s $175 billion missile-defense initiative. These contracts show that AST is well-positioned to continue to meaningfully ramp up the revenue that it obtains from Washington.
Reflecting the latter phenomenon, along with the firm’s direct-to-cell initiatives, Wisniewski recently stated that AST believes that it can generate revenue “approaching $1 billion” in 2027.
The Bottom Line on ASTS Stock
AST’s leading position in the direct-to-cell market, including its likely first-mover advantage over Starlink, leave it well-positioned to obtain tens of billions of annual revenue from this market in the longer term. Similarly, it’s poised to benefit tremendously from rapidly increasing spending by the U.S. military on satellites, along with the advent of space-based data centers.
As a result of all of these points, I believe that the $33 billion market capitalization of ASTS stock is quite low, making the shares attractive for growth investors.
*This article is intended to be informational only; it is not financial advice.
