AST SpaceMobile (NASDAQ: ASTS) stock is posting gains in Monday’s trading. The space-based telecommunications company’s share price was up 6.9% as of 2 p.m. ET. At the same point in the day’s trading, the S&P 500 index and the Nasdaq Composite index were both down 0.4%.
AST SpaceMobile stock is climbing today following news that the company had entered into a long-term contract with Vodafone. AST stock is now up 23% over the last month and 347% across 2024’s trading.
AST SpaceMobile published a press release today announcing that it had entered into a service contract with Vodafone that will extend through 2034. The deal will see AST provide space-based satellite telecom services to Vodafone. In turn, Vodafone will be able to offer these space-based cellular broadband services to customers in its home markets and through its partner markets program in other territories.
AST’s recently announced deal with Vodafone looks to be a significant win. In addition to providing what will likely prove to be a significant new revenue stream over the next decade, the deal points to the potential for the space-based telecom provider to score wins with other players in the category and take market share from other internet service providers.
On the other hand, AST is still in the early stages of beginning to commercialize its technologies — and investors should heavily weigh the company’s risk profile before betting big on the stock. To put the speculative nature of the stock in perspective, the telecom specialist is currently valued at approximately 1,098 times this year’s expected sales.
AST has intriguing competitive positioning in an industry that is likely poised for massive growth over the long term. While the company’s share price could continue to rocket higher in conjunction with new contract wins or favorable macroeconomic and political developments, the stock could see dramatic downside momentum if negative catalysts emerge on those fronts. AST SpaceMobile has the potential to be incredibly rewarding as a long-term stock holding, but investors should keep their personal risk tolerance in mind and understand that shares are primed for volatility.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Vodafone Group Public. The Motley Fool has a disclosure policy.
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