ASTS stock reaches ‘breakthrough’ milestone but analysts eye risks
Low-Earth Orbit satellite company AST SpaceMobile (ASTS) completed its first successful video call to a Verizon (VZ) network on Monday, but that wasn’t enough to lift the stock.
Two mobile devices—one linked to an AST satellite in space, the other to a Verizon tower on Earth—successfully connected in a video call, a demonstration Verizon called a “breakthrough.”
“To be able to call, video chat, or send files—whether in the wilderness or a remote lake community—will only enhance the reliability of our customers' connectivity and communication experience,” Joe Russo, Verizon’s President of Global Network and Technology, said in a press release.
The milestone wasn’t enough to impress investors. AST dipped 0.24% to close Monday at $28.57, though it did claw back from a much steeper intraday drop. And there’s good reason for that.
Out-of-this-world company with out-of-this world performance
AST SpaceMobile stock soared 792% over the past year as investors bet on its satellite-to-phone technology disrupting the telecom industry. Although ASTS has a first-mover advantage, satellite and telecom giants are watching.
For example, SpaceX’s Starlink has primarily focused on satellite internet for homes and businesses, but it recently announced plans to integrate with mobile networks—putting it on a collision course with ASTS.
Beyond SpaceX, ASTS faces pressure from other satellite players and telecom giants looking to bridge connectivity gaps with their own solutions.
Apple has already integrated satellite-based SOS features into the iPhone, and traditional carriers like Verizon and AT&T are exploring direct-to-device satellite connectivity.
Partnerships with existing telecom firms give ASTS a foothold, but if larger, better-funded competitors develop similar capabilities or strike exclusive deals, ASTS could find itself squeezed out.
The company’s success hinges on proving its technology works at scale and securing long-term commercial agreements before competitors eat into its potential market.
ASTS’s wild card—defense contracts
One overlooked catalyst for ASTS in 2025 has been its pivot toward defense applications. The U.S. Space Development Agency (SDA) recently included ASTS in its Tranche 2 Tracking Layer program, awarding a $90 million contract to demonstrate real-time battlefield connectivity.
Hennessy Funds—an asset manager with $4.8 billion in assets—called this a "game-changer," noting that defense contracts could provide steady revenue streams, shielding ASTS from the uncertainties of consumer adoption.
“It does not meet our typical compounder criteria, but our significant proprietary research leads us to believe that it has a compelling risk-return profile," wrote Hennessy Funds portfolio managers in a November 2024 note.
While there remains a risk of complete capital loss, this is more than offset by the increasingly real potential of 20x, 30x, or 50x upside.