Down 30%, Is AST SpaceMobile Stock a Can't-Miss Opportunity Today?

The market is soaring as investors push the artificial intelligence (AI) growth theme into overdrive. Not all stocks have been invited to the party. In fact, many stocks are down big this year, including satellite internet disruptor AST SpaceMobile (ASTS 9.22%). The company and its investors are fearing an increasing encroachment from the elephant in the room: SpaceX.

Shares of AST SpaceMobile have sunk 30% over fears of competition from Elon Musk’s rocket launch and satellite internet giant. But these fears may be an overblown threat to AST SpaceMobile’s business. Does that make the stock a can’t-miss opportunity for investors today?

Innovation in satellite internet

Today, anyone looking to access satellite internet needs a terminal, large antenna, or satellite dish to capture the internet signal from space. AST SpaceMobile’s innovation in large satellite arrays is disrupting the need for these clunky devices. With these huge satellites — as well as partnerships with telecommunications providers — AST SpaceMobile is building a constellation that can beam internet directly to mobile devices.

This is the next step forward in satellite internet capabilities, and could be a huge deal for the entire telecommunications space. Now, anyone with a smartphone will be able to connect to a satellite internet service, with reported speeds capable of handling live-streaming video. By selling through phone providers, AST SpaceMobile can get this direct-to-device offering in front of over 1 billion potential customers once its constellation goes live.

Now, SpaceX wants to tackle this market, as it sees potential disruption to its terminal-based satellite internet business called Starlink. It already has a partnership with T-Mobile for satellite messaging, but recently spent a total of $19 billion (including debt payment commitments) to acquire spectrum from EchoStar. Using this spectrum, SpaceX will be able to offer direct-to-device service that competes with AST SpaceMobile within a few years, according to Elon Musk.

What does the future look like for AST SpaceMobile?

Even though it looks like SpaceX is threatening AST SpaceMobile, the latter company will have the direct-to-device market to itself for at least a few years if it can maintain its launch timeline. The company plans to have its service operational in the United States later this year, and expand to other wealthy nations throughout 2026. This will require many more satellites to be launched into orbit, which it has already contracted for with rocket launch providers.

Elon Musk claims it will take at least two years for SpaceX to enable direct-to-device satellite internet, and his projections are usually optimistic. This gives AST SpaceMobile a lead and no competition once it finishes building its satellite constellation.

As an entirely new market, it is unclear exactly how large the revenue opportunity is for AST SpaceMobile. The company believes it will generate at least $50 million in the back half of 2025 once turning on the service in the United States. For reference, if just 1% of an addressable population of 1 billion customers turn on AST SpaceMobile internet through their mobile internet provider, that is 10 million paying customers. At $10 a month, that would equate to $1.2 billion in revenue for AST SpaceMobile, which it could hit within a few years from a standing start of zero revenue today.

It’s an uncertain future, but one with a ton of potential for AST SpaceMobile shareholders.

ASTS Shares Outstanding data by YCharts

Valuing AST SpaceMobile stock

After this drawdown, AST SpaceMobile now trades at a market cap of approximately $15 billion. In order to fund its spending on satellite development — free cash flow was negative $676 million over the last 12 months — the company has raised funds through convertible bonds and stock offerings. Shares outstanding are up 420% in the last five years, which will be a headwind to share price appreciation over the long run.

AST SpaceMobile may be on the cutting edge of satellite internet innovation and on its way to $1 billion in revenue. However, the stock is getting way ahead of itself at a market cap of $15 billion. Even if the $1.2 billion revenue estimate is hit within a few years, the stock may still be overvalued, and that is before taking into account further share dilution and debt on the balance sheet.

Don’t buy the dip on AST SpaceMobile. This stock is overvalued.