AST SpaceMobile Stock Soars After Earnings. Its Challenge to Musk’s SpaceX Is Ramping Up.

AST SpaceMobile is racing Elon Musk’s SpaceX to get its direct-to-device satellite network operational. (AFP via Getty Images)

AST SpaceMobile stock was surging early Tuesday. The satellite company’s ambition of challenging Elon Musk’s SpaceX looks to be closer to reality.

AST SpaceMobile stock was up 18% at $54.21 in early trading, having reported quarterly results after the market close on Monday. The key piece of news was that the company said that it has a fully funded plan to deploy 45 to 60 satellites into orbit by 2026.

The company is building the first global cellular broadband network in space. Its stock has risen more than tenfold since the start of 2024 after announcing partnerships with telecom companies and launching its first commercial satellites.

As Barron’s has previously written, AST SpaceMobile is taking an ambitious path by aiming to deliver 5G-quality voice, data, and video coverage worldwide. It currently expects to provide nationwide intermittent service in the U.S. by the end of this year, followed by the U.K., Japan and Canada in the first quarter of 2026.

The main question around the stock is how quickly the company can get sufficient craft into orbit to generate revenue and reduce the need to raise capital. Its first 20 satellites were originally meant to be launched in 2023—to date it has launched five commercial satellites and one test model.

CEO Abel Avellan said in a statement alongside Monday’s earnings report that the company is planning orbital launches every one to two months on average during 2025 and 2026. Each launch is expected to take between six and eight satellites, with an estimated cost of $21 million-$23 million per satellite.

Avellan told analysts on an earnings call that the company’s more than $1.5 billion on its balance sheet and expected near-term government and commercial revenue should be enough to enable the 45-to-60 satellite fleet.

“Delays have raised concerns about execution and the company’s ability to meet targeted service milestones. Positively, management expects limited service in key markets ready by year-end 2025 with voice/video/data capabilities on track for early 2026, though we are skeptical,” wrote Oppenheimer analyst Timothy Horan in a research note.

Horan has a Perform rating on AST SpaceMobile stock with no price target.

AST SpaceMobile is racing against rival satellite internet offerings from Elon Musk’s SpaceX—via its Starlink business—and Apple -backed Globalstar , as well as Amazon.com’s Project Kuiper.

So far AST SpaceMobile isn’t generating much significant business, reporting $1.2 million in revenue for the June quarter. However, it expects revenue of between $50 million and $75 million in the second half of this year from government and commercial customers.

“While we think investors may focus mostly on the commercial unlock of D2D [direct-to-device], we think AST’s strategic advantages in digital payload technology and Tech teaming partners may ultimately drive a government-driven story that significantly accelerates over the next few years,” wrote Cantor Fitzgerald analyst Colin Canfield in a research note.

Canfield has an Overweight rating and $30 target price on AST SpaceMobile stock.

Write to Adam Clark at adam.clark@barrons.com