ASTS vs. QCOM: Which Connectivity Stock Has Better Growth Potential?

AST SpaceMobile, Inc. ASTS and Qualcomm Incorporated QCOM are pivotal players in the evolution of global mobile connectivity. AST SpaceMobile is building the world’s first and only global cellular broadband network in space, accessible directly by standard smartphones (4G-LTE/5G devices) for commercial and government use, leveraging its extensive Intellectual Property and patent portfolio. The SpaceMobile Service is provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (LEO) using low-band and mid-band spectrums controlled by Mobile Network Operators (MNOs) in areas lacking terrestrial network coverage.

Qualcomm offers high-performance, low-power chip designs for mobile devices, PCs, XR (Extended Reality), automotive, wearable, robotics, connectivity and AI use cases. The company boasts a comprehensive intellectual property portfolio comprising 4G, 5G and other technologies. Qualcomm’s brands include Snapdragon systems-on-chip, FastConnect Wi-Fi and Bluetooth systems and Qualcomm-branded 4G, 5G and IOT equipment. The company is currently pursuing the integration of on-device generative AI into all of its product lines.

Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.

The Case for AST SpaceMobile

AST SpaceMobile has deployed its first five commercial satellites (dubbed Bluebird) in LEO, marking a key advancement in developing a space-based mobile network infrastructure. These satellites have the largest-ever commercial communications arrays spanning 693 square feet. They offer non-continuous service across the United States using more than 5,600 cells within the premium low-band spectrum.  This achievement follows the success of the company's in-orbit BlueWalker 3 satellite, creating a space-based cellular broadband network that can directly link with mobile devices, eliminating the need for ground-based infrastructure. It plans to deploy 45 to 60 satellites into orbit by the first quarter of 2026. The company boasts a diverse portfolio of more than 3,650 patents and patent-pending claims worldwide for the direct-to-cell satellite ecosystem from space to Earth. 

The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones. It delivers broadband connectivity from space to unmodified mobile devices, providing a service to fill cellular coverage gaps in a differentiated approach compared to other space-based communication services. AST SpaceMobile has partnered with leading carriers such as AT&T Inc. T and Verizon Communications Inc. VZ to tap into a pre-existing pool of cell customers and raise funds to help build a worldwide satellite network. This has enhanced cellular coverage in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.

However, unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility, tariff imposition and geopolitical conflicts, are negatively impacting the company’s operations. These have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance. In addition, AST SpaceMobile faces severe competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar, which are developing satellite communications technology using LEO constellations. To combat such competitive pressure, ASTS has to continuously customize its network offerings, enhance the cost-effectiveness of its products and services and boost the satellite data networks, which increases operating costs and reduces margins.

The Case for Qualcomm

Qualcomm is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company is strengthening its foothold in the mobile chipsets market with innovative product launches. It had extended its Snapdragon G Series portfolio with the addition of next-generation gaming chipsets, Snapdragon G3 Gen 3, Snapdragon G2 Gen 2 and Snapdragon G1 Gen 2 chips. Samsung, one of the major smartphone manufacturers, has deployed the Snapdragon 8 Elite Mobile Platform for its premium S25, S25 Plus and S25 Ultra devices. It is also placing a strong emphasis on developing advanced chipsets for the emerging AI PC market. The company has inked agreements to acquire MovianAI to augment its efforts in fundamental AI research.

The company is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. Qualcomm is witnessing healthy traction in EDGE networking, which helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are also fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification.  

Despite efforts to ramp up its AI initiatives, Qualcomm has been facing tough competition from Intel in the AI PC market. Shift in the share among OEMs at the premium tier has reduced Qualcomm's near-term opportunity to sell integrated chipsets from the Snapdragon platform. The company is also facing stiff competition from Samsung’s Exynos processors in the premium smartphone market, while MediaTek is gaining market share in the mid-range and budget smartphone market. Qualcomm’s extensive operations in China are further likely to be significantly affected by the U.S.-China trade hostilities.

How Do Zacks Estimates Compare for ASTS & QCOM?

The Zacks Consensus Estimate for AST SpaceMobile’s 2025 sales implies year-over-year growth of 1261.2%, while that of EPS suggests a decline of 53%. The EPS estimates have been trending southward (down 2%) over the past 60 days.

The Zacks Consensus Estimate for Qualcomm’s 2025 sales indicates year-over-year growth of 12.3%, while that for EPS indicates an improvement of 15.9%. The EPS estimates have been trending northward (up 0.9%) over the past 60 days.

Price Performance & Valuation of ASTS & QCOM

Over the past year, AST SpaceMobile has gained 32% compared with the industry’s growth of 21.4%. Qualcomm has declined 8% over the same period.

Qualcomm looks more attractive than AST SpaceMobile from a valuation standpoint. Going by the price/sales ratio, Qualcomm’s shares currently trade at 3.75 forward sales, significantly lower than AST SpaceMobile’s 67.77.

ASTS or QCOM: Which is a Better Pick?

Both AST SpaceMobile and Qualcomm carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both companies expect their sales to improve in 2025. Qualcomm has shown a relatively steady revenue growth for years, while AST SpaceMobile has been facing a bumpy road. In terms of price performance, AST SpaceMobile has outperformed Qualcomm. With long-term earnings growth expectations of 26.1%, AST SpaceMobile is relatively better placed than Qualcomm (long-term earnings growth expectations of 7.1%), despite a less attractive valuation metric. Consequently, AST SpaceMobile seems to be a better investment option at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research