AST SpaceMobile Rockets Higher on Verizon's $100 Million Stake

Key Points

• AST SpaceMobile is building the world’s first and only space-based satellite cellular broadband network with deals like AT&T to provide SpaceMobile services, enabling 100% end-to-end cellular coverage of the United States.
• AST signed a deal with Verizon for a $100 million commitment to provide 100% coverage for the continental United States on 850 MHZ spectrum.
• AST SpaceMobile will commence commercial operations on the launch of its initial Bluebird satellites in July or August, pending FCC approval.

AST SpaceMobile Inc. NASDAQ: ASTS is constructing the world’s first and only space-based cellular broadband network. They are making 5G cellular broadband available through over 40 telcos, covering more than 2.8 billion people.

AST SpaceMobile operates in the computer and technology sector and competes with satellite network operators like Starlink, operated by Tesla Inc. NASDAQ: TSLA CEO Elon Musk and Planet Labs PBC NYSE: PL and space companies like Momentus Inc. NASDAQ: MNTS and Rocket Lab USA Inc. NASDAQ: RKLB.

Providing Cellular Broadband Access to Everyone and Everywhere

There are over 5 billion mobile phones worldwide. Gaps in coverage are a regular, everyday phenomenon. As a result, billions of people without cellular broadband are unconnected to the economy. AST SpaceMobile has set out to help alleviate this problem by building a global cellular broadband network in space. Most significantly, thanks to its extensive portfolio of patents, it will enable unmodified mobile devices to operate directly daily.

Satellite Phone Capabilities on a Smartphone

Bluewalker 3 was designed to connect everyday smartphones to cellular broadband from space. It enables cellular dead zones to receive cellular signals. The company tested its capabilities in isolated and far-out places like isolated islands in eastern Maui, Hawaii. These places have no cellular service from any carriers.

In 2023, AST made the first satellite-to-smartphone voice call from Tokyo, Japan, to Midland, Texas. In June 2023, AST performed the first-ever satellite-to-smartphone LTE data download on an unmodified smartphone. The significance is that smartphones only operate on cellular networks, and satellite phones only operate on satellite networks.

AT&T Deal to Cover Every Inch of the United States

AST SpaceMobile signed deals with over 40 mobile network operators around the world. The carriers' goal is to provide complete end-to-end coverage. AST signed a 6-year definitive commercial agreement with AT&T Inc. NYSE: T for SpaceMobile service to enable coverage to every inch of the United States. They also signed deals with Vodaphone Group Public Ltd. Co. NASDAQ: VOD, Nokia Oyj NYSE: NOK, and over 40 other operators covering over 2.8 billion people.  

Verizon's $100 Million Deal with AST SpaceMobile

On May 29, 2024, AST SpaceMobile announced a partnership with Verizon Communications Inc NYSE: VZ to target 100% geographical coverage of the continental United States from space on a premium 850 MHz cellular spectrum. Verizon has committed $100 million, which includes $65 million in commercial payments and $35 million in convertible notes. News sends shares soaring over 45% stock, largely driven by the 27.05% short interest.

ASTS Launches Higher on a Daily Bull Flag Breakout Pattern   

The daily candlestick chart on ASTS illustrates an ascending breakout triangle pattern. The bull flag formed after the flagpole parabolic run-up to the $5.70 peak. ASTS proceeded to form lower highs and lower highs in a parallel diagonal trend. The breakout was triggered when ASTS gapped to $5.68 and squeezed higher up to $9.40 on news of its deal with Verizon. The daily relative strength index (RSI) surged through the 80-band and is chopping around the 79-band. Pullback support levels are at $7.10, $5.68, $4.64, and $3.55.

AST SpaceMobile's Q1 2024 Business Update

AST SpaceMobile provided an update on May 15, 2024. The company recorded a net loss of 16 cents, beating consensus estimates by 5 cents. Revenues are just starting to generate at $500,000 vs. $3.67 million consensus estimates. The company is on target for July or August delivery to Cape Canaveral of the first 5 satellites to allow nationwide non-continuous service with over 5,600 cells in the premium low-band spectrum.

AST SpaceMobile continues to advance talks with various government agencies, including the Federal Communications Commission (FCC). It has also advanced talks with strategic partners following the blueprint of commercial payments accompanying commercial agreements.

Block 1 Bluebird Satellite Launches Will Mark The Start of Commercial Operations

AST SpaceMobile CEO Abel Avellan detailed the AT&T commercial agreement to provide space-based cellular broadband to them and their users through a revenue share model. This commercial agreement serves as a template moving forward with variations specific to the mobile operators. The 5 Block 1 Bluebird satellites will mark the beginning of their commercial operations expected to be delivered in July or August and launched shortly after.

Avellan detailed, “With these first five satellites, we will have the ability to offer U.S. nationwide non-continuous service with over 5,600 individual cells using premium broadband spectrum. Let me spend a moment discussing our Block 1 satellites and the importance of their size and power.”

Avellan concluded, “These first five satellites will be the largest commercial satellites in low-Earth orbit alongside BlueWalker 3. That, combined with the processing capacity of each of them, allowed us to achieve our commercial goals with less than 100 satellites. This will enable cellular broadband everywhere for the phone you have in your pocket.”

AST SpaceMobile analyst ratings and price targets are on MarketBeat.