We came across a bullish thesis on AST SpaceMobile, Inc. (ASTS) on Substack by Steve Wagner. In this article, we will summarize the bulls’ thesis on ASTS. AST SpaceMobile, Inc. (ASTS)’s share was trading at $32.18 as of March 6th.
A broadband satellite hovering in the sky, highlighting the company’s satellite-based broadband communication solutions.
AST SpaceMobile (ASTS) is making steady progress toward commercialization, with key developments in its satellite deployment, strategic partnerships, and financial positioning. While there were no game-changing announcements in its Q4 and full-year 2024 update, the company is clearly laying the groundwork for a commercial rollout in 2025. The first five Block 1 BlueBird satellites, launched in September 2024, are fully operational and have successfully conducted broadband-speed video calls with major telecom partners like AT&T, Verizon, and Vodafone. With agreements in place with ~50 mobile network operators (MNOs) covering nearly 3 billion subscribers, ASTS is well-positioned for global expansion. A newly announced Vodafone European distribution entity will accelerate deployment across key markets. Additionally, the company secured a $43M contract with the U.S. Space Development Agency (SDA), opening the door for larger defense contracts that have been largely overlooked by the market. Another critical milestone is ASTS’s long-term spectrum agreement for 45 MHz of lower mid-band spectrum in the U.S., which will enhance broadband capacity and enable speeds of up to 120 Mbps.
Financially, ASTS ended 2024 with a strong liquidity position, holding nearly $980M in cash after a $460M convertible senior notes offering. This capital ensures the company can scale satellite production and maintain operations through its transition to revenue generation. The company is currently producing 40 Block 2 BB satellites at its Texas facility, with long-lead components secured for more than 50 units. Manufacturing expansion is also underway, with facilities in Texas, Barcelona, and Florida increasing capacity to support a production rate of six satellites per month by the second half of 2025. ASTS has also secured launch capacity for up to 60 satellites between 2025 and 2026, ensuring a full constellation deployment.
Management reaffirmed that ASTS expects to become free cash flow positive with approximately 25 operational satellites, driven by revenue from government contracts, MNO agreements, and infrastructure sales. Early commercial service with AT&T, Verizon, and Vodafone is planned for 2025, with continuous coverage in the U.S., Europe, and Japan by 2026. The company is also securing additional spectrum rights and regulatory approvals, including full FCC licensing. While competitors like Starlink’s partnership with T-Mobile present risks, ASTS offers full broadband capabilities—voice, text, and data—without requiring modifications to existing mobile phones, providing a highly scalable solution for rural connectivity, emergency services, and enterprise applications.
Despite past delays, ASTS appears to be learning from previous setbacks. While the market is currently pricing in a smooth commercialization path, execution risks remain, and another delay could impact investor sentiment. However, ASTS holds over 3,500 patents, creating significant barriers to entry for competitors. The broader space economy represents a massive opportunity, and ASTS’s success could justify a valuation of $8B–$10B. While cautious optimism is warranted, if ASTS delivers on its roadmap, today’s valuation could look like a bargain in hindsight.
AST SpaceMobile, Inc. (ASTS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held ASTS at the end of the third quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of ASTS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ASTS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.