AST SpaceMobile (NASDAQ: ASTS) has cleared a key milestone in its effort to connect terrestrial mobile phones via a satellite-based network, and investors are celebrating the accomplishment. Shares of AST climbed as much as 19% on Tuesday after the company outlined its accomplishment.
AST is a space stock focused on solving a particularly vexing problem. The company is developing technology that would allow modern cellular phones to communicate with its satellites, which, if successful, has the potential to eliminate so-called “dead spots” common with terrestrial cellular networks and expand connectivity to new areas.
On Tuesday, the company said its engineers successfully placed a call from Hawaii to Spain, the first-ever connection for voice and data using satellites to achieve modern 5G network quality and speed. The call was placed on Sept. 8 using an unmodified Samsung phone in an area that has no cellular service.
“Once again, we have achieved a significant technological advancement that represents a paradigm shift in access to information,” CEO Abel Avellan said in a statement. “We are more confident than ever that space-based cellular broadband can help transform internet connectivity across the globe by filling in gaps and connecting the unconnected.”
This is an impressive milestone, and investors have good reason to celebrate. But they should also keep in mind that AST still has a long way to go before the company can be declared a success.
Demos are great, but the real test of these networks will be when they are fully deployed and have to manage through the complexity and bottlenecks of multiple users. That won’t happen until AST spends significant sums to build out its network and initiate service. And the terrestrial cellular companies that AST is hoping to disrupt continue to invest in their technologies and infrastructure as well.
If all goes to plan, AST could end up a big winner. But for now, this is a stock with both a lot of promise and a lot of risk. This is an important step in AST’s development, but investors would be wise to limit this to a small piece of a well-diversified portfolio.
10 stocks we like better than AST SpaceMobile
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and AST SpaceMobile wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 18, 2023
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]