100% US coverage on the horizon! Discover how AST SpaceMobile’s partnership with Verizon is revolutionizing wireless service. 📲

AST SpaceMobile (ASTS) stock has surged following a partnership with Verizon announced on May 28, 2024. Verizon has committed $100 million to integrate AST SpaceMobile’s direct-to-cellular service, aiming for full coverage of the continental U.S. on the premium 850 MHz spectrum. This agreement includes $65 million in commercial prepayments and $35 million in convertible notes. The partnership will significantly enhance U.S. cellular connectivity, eliminating dead zones. Additionally, AST SpaceMobile has a commercial agreement with AT&T for a space-based broadband network until 2030. These developments highlight a competitive landscape where T-Mobile, in collaboration with SpaceX’s Starlink, is also advancing its global connectivity solutions. UBS has raised AST SpaceMobile’s price target from $7 to $13, citing partner announcements and progress on funding and regulatory approvals.

Verizon Partnership: A $100M Commitment

In a bold move to enhance cellular connectivity, Verizon (VZ) has committed $100 million to AST SpaceMobile. This substantial investment is set to provide direct-to-cellular service for Verizon customers, leveraging AST SpaceMobile’s satellite network. Abel Avellan, founder, chairman, and CEO of AST, highlighted the significance of this partnership, stating, “This new partnership with Verizon will enable AST SpaceMobile to target 100% coverage of the continental United States on premium 850 MHz spectrum with two major U.S. mobile operators in the most valuable wireless market in the world, a transformational commercial milestone.”

The $100 million commitment from Verizon includes $65 million in commercial prepayments, of which $45 million are subject to conditions, and $35 million in convertible notes. This strategic alliance will allow Verizon to utilize its spectrum alongside AST’s satellite network to provide connectivity in remote and hard-to-reach areas, according to Srini Kalapala, Verizon’s Senior Vice President of Technology and Product Development. This initiative aims to bridge the connectivity gap in regions where traditional land-based infrastructure fails to deliver reliable cellular signals.

AT&T Collaboration: Expanding the Network

The partnership with Verizon is not AST SpaceMobile’s only significant alliance. On May 15, 2024, ASTS and AT&T (T) entered into a definitive commercial agreement to establish a space-based broadband network that connects directly to everyday cell phones. This agreement, which extends until 2030, builds on a previously existing Memorandum of Understanding between the two companies. Avellan emphasized the importance of this partnership, describing it as “one giant leap towards enhanced connectivity for consumers and businesses across the country.”

AST SpaceMobile plans to launch its first commercial satellites this summer, sending five satellites into low Earth orbit from Cape Canaveral. These initial satellites will enable commercial services that have already demonstrated significant milestones, including the first voice call, text, and video call via space between ordinary smartphones. These achievements in 2023 mark a critical step forward in the company’s mission to provide universal connectivity.

Competitive Landscape: T-Mobile and SpaceX

The competitive landscape for space-based connectivity is intensifying. About a week after the AT&T and AST SpaceMobile partnership announcement, T-Mobile and SpaceX showcased a direct-to-cell satellite service. SpaceX engineers demonstrated the first video call made using an “unmodified mobile phone” on their Starlink satellites, signaling a significant advancement in global cell connectivity.

This collaboration between T-Mobile and SpaceX positions them as frontrunners in the race for space-based telecommunications. The demonstration underscores T-Mobile’s ambition to leverage SpaceX’s Starlink satellites to provide seamless global connectivity, potentially outpacing AT&T and AST SpaceMobile. Industry observers suggest that Elon Musk could further capitalize on this momentum by launching a dedicated satellite phone service and smartphone under the Starlink brand, solidifying their market dominance.

Market Response and Future Outlook

The market has responded positively to AST SpaceMobile’s recent developments. On June 10, 2024, UBS raised its price target for AST SpaceMobile from $7 to $13, maintaining a Buy rating on the shares. The firm cited the company’s strategic partnerships, progress in funding, and regulatory approvals as key factors reinforcing their confidence in ASTS’s growth prospects.

AST SpaceMobile’s partnerships with major telecommunications companies like Verizon and AT&T, combined with their ambitious satellite launch plans, position the company for significant growth in the coming years. The potential to provide universal cellular coverage in previously inaccessible areas represents a transformative milestone for the telecommunications industry.

Insights:

1. Verizon’s $100 million commitment underscores the strategic importance of satellite-to-cellular services.
2. AST SpaceMobile’s partnerships are pivotal in enhancing U.S. cellular coverage.
3. Competitive pressures are intensifying with T-Mobile and SpaceX’s advancements.

The Essence (80/20)The Origins and Evolution of the 80/20 Principle The Discovery by Vilfredo Pareto In 1897, Italian economist Vilfredo Pareto uncovered a striking pattern in his study of wealth and... More: The core topic is the significant advancements in satellite-to-cellular connectivity driven by AST SpaceMobile’s partnerships with Verizon and AT&T. The Verizon partnership focuses on eliminating dead zones and achieving full U.S. coverage on the 850 MHz spectrum. The AT&T agreement aims to establish a space-based broadband network, competing with T-Mobile and SpaceX’s Starlink. These collaborations highlight the transformation in mobile connectivity, addressing remote areas and enhancing overall service reliability.

The Guerilla Stock Trading Action Plan:

1. Monitor AST SpaceMobile’s satellite launch schedule and service rollout.
2. Track the implementation progress of Verizon and AT&T partnerships.
3. Analyze the competitive dynamics between AST SpaceMobile, T-Mobile, and SpaceX.
4. Stay updated on regulatory approvals and funding progress impacting AST SpaceMobile.

Blind Spot: One potential overlooked detail is the technical challenges and timeline risks associated with deploying and integrating satellite-to-cellular services on a large scale. Ensuring consistent and reliable connectivity may face unforeseen hurdles.

ASTS Technical Analysis

Price Trend and Moving Averages:

• The stock experienced a significant upward breakout around mid-May, moving from approximately $3 to a peak of $12.88.
• The 50-day moving average (MA) is currently at $5.02, while the 200-day MA is at $4.21, indicating a strong bullish trend as the shorter-term MA is above the longer-term MA.

Volume:

• There has been an increase in trading volume coinciding with the price breakout, suggesting strong buying interest and accumulation.

Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI):

• The RSI is at 78.52, which is in the overbought territory. This suggests that the stock might be due for a pullback or consolidation in the near term.

On Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV):

• The OBV is showing a steady increase, reinforcing the bullish momentum as it indicates more volume on up days compared to down days.

Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More:

• The Stochastic RSI is at 0.690, which is relatively neutral but leaning towards overbought. This suggests that while the stock has strong momentum, it might be prudent to watch for potential signs of overextension.

Average Directional IndexThe Average Directional Index (ADX) stands as a cornerstone indicator in the toolkit of technical traders, offering insights into the strength of market trends. Developed by Welles... More (ADX):

• The ADX is at 61.19, indicating a very strong trend. Values above 25 generally suggest a strong trend, and above 50 suggests a very strong trend.

Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More:

• The Chaikin Oscillator is at 14,407,795, showing positive accumulation and buying pressure.

Time-Frame Signals:

• 3-Month Horizon: Hold. Given the strong upward trend and the current overbought conditions, the stock might experience some consolidation or minor pullbacks. However, the overall trend remains positive.
• 6-Month Horizon: Buy. Assuming the bullish momentum continues and there are no major negative catalysts, the stock is likely to perform well over this period.
• 12-Month Horizon: Buy. The strong trend and accumulation indicators suggest that the stock could continue to rise over a longer period, barring any significant changes in fundamentals or market conditions.

Overall, AST SpaceMobile Inc. (ASTS) shows strong bullish signs, but caution is advised in the short term due to overbought conditions indicated by the RSI.

Remember, past performance is not an indication of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions. 🧡

Looking Ahead

AST SpaceMobile is at the forefront of a new era in telecommunications, driven by innovative satellite technology and strategic partnerships. The collaborations with Verizon and AT&T highlight the industry’s shift towards space-based connectivity solutions, promising to eliminate dead zones and enhance service coverage across the United States. As competition heats up with players like T-Mobile and SpaceX entering the fray, the race to dominate the space-based telecommunications market is well underway. Investors and consumers alike are poised to witness a significant transformation in how we connect and communicate, heralding a future where universal connectivity is within reach.