AST SpaceMobile’s (AST) recent achievements bode well for its overall outlook and long-term stock performance. Specifically, multiple signs suggest the firm is close to launching its direct-to-device (D2D) satellite service, and the company has been very successful in building fruitful partnerships with both governments and major telecom companies. Finally, it looks well-positioned to grow its satellite capacity quickly, and it appears poised to enter new, potentially lucrative markets over the longer term.
Given all of these points, long-term growth investors should consider buying the shares.
Close to Launching Its Direct-to-Device Service
AST stated in a recent filing with the FCC that it intends to begin D2D service in the UK “imminently,” using Vodafone’s (VOD) spectrum in the country.
When asked on AST’s Q2 earnings call in August, “When the generic AT&T (T) and Verizon (VZ) customers will be able to test out the service?” AST President Scott Wisniewski said the firm would aim to have its D2d offering “ready for consumers” by the end of this year. CEO Abel Avellan said the company was “racing towards” providing beta trials. Meanwhile, the CEO said the D2d service would not be officially available commercially until next year, and the company would not start recognizing revenue from it until then.
Still, successful beta trials should provide significant, positive catalysts for ASTS stock.
Fruitful Partnerships With Governments and Telecom Giants
The Japanese government has agreed to spend about$920 million on the satellites being launched by AST in partnership with Japanese telecom giant Rakuten, media outlets reported based on a filing by the government in July. Tokyo is looking to use AST’s technology to reduce its reliance on Elon Musk’s Starlink, a unit of SpaceX (SPCX), during emergencies.
Similarly, in America, AST is collaborating with AT&T to develop capabilities that will be used by FirstNet, the country’s network for First Responders.
Meanwhile, AST obtained three new contracts from Washington that should generate more than $100 million of revenue cumulatively by the end of 2027, brining the firm’s total backlog to an impressive $1.3 billion. Additionally, helped by its deals with the Pentagon, the firm expects its total top line to approach $1 billion in 2027.
In terms of alliances with telecom giants, AST now has over 60 such partners that have a total of more than 3 billion subscribers. Among its telecom allies are AT&T, Verizon, Vodafone (VOD), Rakuten, and Bell Canada. AST’s huge number of large telecom partners leaves it well-positioned to generate very large amounts of revenue from its D2D service in the longer term.
Poised to Grow Its Capacity Quickly and Enter Lucrative, New Vertical Markets
AST has expanded its manufacturing capacity to a rather impressive six satellites per month. Further, the firm’s proprietary ASIC chip, which is currently being manufactured, is slated to boost its processing bandwidth per satellite by almost ten times.
Among the additional vertical markets that the firm intends to enter are “radar, … Internet of Things, (and) AI edge compute,” Avellan reported. All of these markets could potentially be very lucrative.
potential for AST Stock
The shares have a market capitalization of $26 billion. Given the company’s tremendous progress and gigantic opportunities, this valuation appears to be very attractive, making ASTS an enticing pick for long-term growth investors.
his article is intended to be informational only; it is not financial advice.
