Share prices of AST SpaceMobile(NASDAQ: ASTS) have skyrocketed about 460% since the start of the year. To say that the growth stock has drawn considerable investor interest would be a gross understatement. But while onlookers may be impressed with the stock's meteoric rise, many still wonder what it is exactly that the company does.
Let's take a closer look at AST SpaceMobile to see what has the market so excited.
The ABCs of AST SpaceMobile
In the very early innings of its development, AST SpaceMobile characterizes itself as a company "building the first and only space-based cellular broadband network." That's no small endeavor. To offer this service, AST SpaceMobile has to complete several tasks.
For instance, the company needs to attract telecom partners, and it has achieved success here. Most recently, AST SpaceMobile signed a commercial agreement with AT&T, which the companies say will "provide their first space-based broadband network direct to everyday cellphones."
Earlier this year, AST SpaceMobile reported an investment from Alphabet and Vodafone (as well as AT&T). Speaking to the merits of the deal, Vodafone CEO Margherita Della Valle said that "Vodafone's investment and collaboration with AST SpaceMobile will help make our mobile connectivity services available everywhere for our customers across Europe and Africa."
Additionally, AST SpaceMobile is working toward deploying its satellites in low Earth orbit. A big step toward achieving this will happen next month as the company plans to launch the first five commercial satellites into space.
Is AST SpaceMobile a good stock to buy now?
There's no denying that telecommunications companies are taking AST SpaceMobile seriously. The company claims it has inked agreements with over 45 mobile network operators worldwide, representing over 2.8 billion total existing subscribers.
However, prospective investors should appreciate that plenty of risks remain -- especially considering the company is not generating organic cash at the moment. Developing a network of satellites to provide space-based broadband cellular service won't be easy. Potential investors should be comfortable with a higher degree of risk here than with your average stock.
Should you invest $1,000 in AST SpaceMobile right now?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Vodafone Group Public. The Motley Fool has a disclosure policy.
