Shares of satellite-based cellular broadband services firm AST SpaceMobile Inc. (NASDAQ: ASTS) spiked by as much as almost 17% in morning trading on February 26, 2025, after analysts at Cantor Fitzgerald upgraded the company to a rating of Strong Buy the day prior and the firm announced its latest major contract.
Cantor is only the second Wall Street firm to re-evaluate its rating of ASTS shares so far in 2025, but it joins a number of other institutions that are already broadly optimistic about a company that has emerged as a top pick in the space race.
While investors have no doubt been enticed by Cantor's upgrade, there are many other compelling reasons why ASTS shares stand out among firms aiming to develop business in space—though it remains mostly in its pre-revenue phase, AST SpaceMobile has successfully completed a number of important operational steps that have allowed it to secure multiple critical contracts.
Further, the space market is largely untapped and fast-growing, with a number of firms like Redwire Corp. (NYSE: RDW) and Rocket Lab USA Inc. (NASDAQ: RKLB) aiming to shore up their positions in different niches. AST seems increasingly likely to have a significant role in providing satellite-based broadband to customers out of range of traditional service.
Satellite Launches and Contracts Fuel Analyst Interest
Though AST has not yet fully launched its operations, its share price rocketed upward by a massive 824% in the year leading to February 26, thanks in large part to a series of successful commercial satellite launches in September and October 2024. These developments give the company crucial infrastructure in place to begin providing intermittent service and prove that AST's technology is capable.
The company has also enjoyed numerous new contracts as its infrastructure has become increasingly robust. On February 26, and likely also contributing to the share price spike, AST announced that it had secured a $43-million subcontract on a U.S. Space Development Agency award. The company has already succeeded through a government contract involving its BlueWalker-3 satellite, launched in 2022. Though AST has not revealed many details around the terms of this latest contract agreement, it appears that it may be related to the company's direct-to-cell communications service and its capacity to support terrestrial missions under the Proliferated Warfighter Space Architecture program.
The presence of a second such agreement may signal that AST's capabilities extend further into the government space than previously anticipated, as the company has generally positioned itself as a commercial broadband services firm.
Telecom Partnerships Remain Promising
Besides a burgeoning partnership with the Space Force, AST also has numerous agreements in place with major telecommunications companies that should help to ensure its services are widely adopted as they continue to come online. As T-Mobile US Inc. (NASDAQ: TMUS) has launched its partnership with Elon Musk's Starlink, other 5G providers including Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) have rushed to partner with AST. Vodafone also announced a major 10-year agreement with AST late in 2024 that should provide additional service in markets around the world.
More Infrastructure Build-Out to Come, But Risks Remain
[content-module:TradingView|NASDAQ: ASTS]A January authorization from the FCC gave AST the key go-ahead to begin testing its previously launched satellites on Verizon and AT&T networks. The company plans to launch a new batch of satellites, likely later in the quarter. If these steps go smoothly, AST will be closer to fully operational.
Investors may still want to keep a couple of things in mind before diving into an ASTS position. First, shares remain highly volatile; despite the bump on February 26, they remain down more than 6% in the five-day period leading to that day, for example. Further, short interest in ASTS stock is significant. As of February 26, short interest represents more than 42.7 million shares, an increase of a whopping 30.1% over the prior month. Whether AST SpaceMobile can continue to fly high or if the bearish investors may be correct in their hesitation remains to be seen.
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