AST Spacemobile Rises 101.7% in Six Months: How to Play the Stock?

AST SpaceMobile ASTS has gained 101.7% in the past six months compared with the wireless equipment industry’s growth of 21%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500’s growth during this period.Image Source: Zacks Investment ResearchIt has underperformed its competitors, such as Globalstar, Inc. GSAT and Viasat, Inc. VSAT. Globalstar has surged 125.1% while Viasat has returned 144.1% during this period.Key Growth Drivers for ASTSASTS is building the world’s first global cellular broadband network in space, accessible directly by standard smartphones (4G-LTE/5G devices) for commercial and government use, leveraging its extensive Intellectual Property and patent portfolio. The company recently successfully launched BlueBird 6 satellite into orbit from the Satish Dhawan Space Centre in Sriharikota, India. This was the largest commercial communication array ever deployed in low earth orbit. The system is 3x larger and capable of delivering 10x capacity compared to ASTS’ Bluebird 1-5 satellites. The satellite is engineered to deliver up to 120 Mbps peak data rates to standard, unmodified mobile devices. Terrestrial network infrastructure has its limitations. Despite rapid deployments of 5G and fiber networks nationwide, a large area worldwide has remained outside of the network coverage area. Remote and rural locations, which are sparsely populated, are often deemed unviable for network deployment by major telecom companies. Moreover, geographically challenging terrain makes it difficult to set up ground network infrastructure. Hence, ASTS’ space-based connectivity can be a game changer in these scenarios. Several major telecom operators worldwide are collaborating with ASTS expand their coverage in rural and remote regions. There are initiatives from several governments worldwide supporting this trend, as it will bridge the digital divide. Network operators such as AT&T, Verizon, Vodafone, Rakuten, Google, American Tower, Bell and stc Group and others aim to leverage ASTS capabilities to increase accessibility of high-speed 4G and 5G networks and support voice, full data and video applications.There is a growing demand for ASTS space-based connectivity in the defense and public safety domains as well. AT&T FirstNet is set to begin beta service testing of space-based connectivity for public safety officials in the first half of 2026. The U.S. Government also aims to utilize satcom for military and government communications infrastructure. ASTS has secured multiple U.S. Government contracts, which increase its revenue-generating opportunities.Key ChallengesAST SpaceMobile operates in a highly competitive mobile satellite services market. The company faces severe competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar, which are developing satellite communications technology using LEO constellations. Viasat is also expanding into space-based connectivity and collaborating with major telecom operators. Such trends can impose a challenge to ASTS’ satcom growth initiatives. Moreover, to maintain its competitive edge amid growing competition, the company is rapidly improving its SATCOM capabilities. The company plans to launch 45-60 satellites by the end of 2026. This is driving up the operating expenses and putting pressure on the margin. We expect pressure on the bottom line to remain in the near term.Satellite materials prices often fluctuate due to several geopolitical and macroeconomic factors. This increases capital costs for the company. Moreover, tariff-related uncertainties and volatility in foreign exchange are other concerns.Image Source: Zacks Investment ResearchEstimate Revision Trend of ASTSEarnings estimates for 2025 and 2026 have decreased over the past 60 days.Image Source: Zacks Investment ResearchKey Valuation Metric of ASTSHowever, from a valuation standpoint, ASTS is currently trading at a premium compared to the industry. AST SpaceMobile trades at a forward price-to-sales ratio of 114.07, well above the industry.Image Source: Zacks Investment ResearchEnd NoteWith a comprehensive portfolio of 3,800 patents and patent-pending claims, AST SpaceMobile is well-positioned to capitalize on the expanding satellite communication market. Collaboration with major telecom operators worldwide and a growing international footprint are positive. Gateway hardware sales and various commercial and U.S. government are expected to drive revenues.However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, or economic downturns, can significantly impact overvalued stocks like ASTS. The company currently carries a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Viasat Inc. (VSAT): Free Stock Analysis Report Globalstar, Inc. (GSAT): Free Stock Analysis Report AST SpaceMobile, Inc. (ASTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks