The surge in AST SpaceMobile's share price is regaining momentum.
For the second consecutive day, AST SpaceMobile (ASTS 10.24%) shares are seeing a surge in activity.
AST's stock took a hit earlier in the week after the company announced it would raise $460 million through the sale of convertible debt to finance the development of new direct-to-cell satellite communications satellites. However, the pessimism was short-lived as AST's stock rebounded significantly the following day, following a prominent announcement by customer Vodafone.
Vodafone claimed the world's first video call via satellite using a standard smartphone from a remote location. The impressive feat was accomplished using an AST satellite.
Today, AST's shares are soaring a further 17.5%, making up all its losses from earlier in the week. The catalyst for this surge is the Federal Communications Commission (FCC) granting AST permission to begin testing its satellites in the United States.
This isn't entirely new news, as PCMag had previously reported that the FCC had granted AST "Special Temporary Authorization," or STA, to conduct trials with U.S. partner AT&T. What makes today's announcement noteworthy is that the FCC STA also permits AST to conduct tests with Verizon Communications.
AST's five BlueBird satellites, currently in orbit, will join the tests, providing non-continuous cellular broadband service across the U.S. and select global markets. The company estimates that the five satellites can deliver the equivalent of 5,600 coverage cells in the U.S., although it remains unclear how many simultaneous users they can support.
However, while the news is promising, investors are still questioning the timeline for commercial operations and revenue generation. When will AST move beyond testing and begin making money?
AST's Global Head of Regulatory Affairs, Vikram Raval, described the FCC's decision as a "pivotal moment," with Chief Commercial Officer Chris Ivory adding that the STA will "accelerate our path to commercial activity."
The recent developments underscore the company's progress in securing contracts and gaining regulatory approvals. Here are some key achievements:
- The successful launch and deployment of five BlueBird satellites in September 2024.
- A launch campaign for next-generation Block 2 BlueBird satellites, aimed at deploying up to 60 satellites by 2026.
- A commercial contract with Vodafone to provide space-based cellular broadband connectivity in Europe and Africa through 2034.
- U.S. government contracts that have already contributed to revenue generation.
Despite these achievements, the company's commercial timeline and revenue potential remain uncertain. In 2025, AST SpaceMobile anticipates incurring a final loss before generating positive profits of $408 million. This suggests that the company is nearing breakeven and can expect substantial revenue growth in the near future.
In summary, AST SpaceMobile's shares continue to demonstrate strong momentum after receiving FCC approval to test its satellites with both AT&T and Verizon. While the company has made significant progress in launching satellites, securing contracts, and generating revenue, a clear timeline for commercial operations and significant revenue growth is yet to emerge.
Investors are still expressing concerns about the timeline for AST SpaceMobile to transition from testing to generating revenue, as they anticipate the company to incur a final loss before seeing profits of $408 million in 2025. Despite this, AST's Global Head of Regulatory Affairs, Vikram Raval, and Chief Commercial Officer Chris Ivory view the FCC's permission to test with both AT&T and Verizon as a "pivotal moment" that will accelerate the company's path towards commercial activity in the investing world of finance.
