Why AST SpaceMobile Stock Jumped Nearly 30% Last Month

AST SpaceMobile (NASDAQ: ASTS) stock soared in 2025. The 244% gain came as investors began to get excited about the prospect of AST tapping into a massive potential market of smartphone users who might want direct satellite internet access.

That excitement grew in December for a good reason, and shares surged 29.2%, according to data provided by S&P Global Market Intelligence.

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A defining moment for AST SpaceMobile

AST is developing a low Earth orbit (LEO) network aimed at delivering broadband connectivity to regular smartphones. LEO positions the satellites just a few hundred miles above the Earth, which helps minimize delays that have traditionally plagued older satellite systems placed in higher orbits.

The successful orbital launch of the company's BlueBird 6 satellite array in December was what AST SpaceMobile founder and CEO Abel Avellan called a "breakthrough moment." BlueBird 6 is the largest commercial communications constellation ever launched into low Earth orbit. It has 10 times the data capacity of the existing satellites AST already had in orbit. It will enable peak data rates that will support voice, video, and data needed for standard smartphones.

Investors view it as a significant step in the company's path to generating meaningful revenue and achieving sustained profitability, helping to send shares higher in December.

Analysts are divided

That successful launch helped lead Bank of America analysts to boost the firm's price target from $85 to $100 per share. With the stock recently trading near that level, a neutral rating was maintained.

The current valuation is high, however. A market capitalization of approximately $35 billion indicates that investors have already factored in the successful execution of upcoming launches, as well as the development of consumer demand for the technology. Investors wanting to get in ahead of commercialization isn't uncommon with space stocks. It takes years to build and deploy a full constellation of satellites. AST plans a rapid cadence of launches in 2026, including the next-generation BlueBird 7.

The company hopes to have between 45 and 60 satellites in orbit by the end of 2026. However, some analysts believe investors are not fully considering the risks associated with that plan. Scotiabank analyst Andres Coello recently cut his rating on AST SpaceMobile to the equivalent of a sell. His price target on the stock is just $45.60 per share. Coello believes the valuation has become unjustified, given the company's lack of a retail customer base, according to Barron's. Estimates for 2026 sales are about $270 million.

Better entry point ahead?

While AST does have agreements with dozens of global mobile network operators and partnerships with some of the largest communication telecom companies, it is valued at more than 100 times that 2026 sales estimate.

Shares plunged after Coello's report last week, with the implication of a roughly 50% downside for the stock. That reaction was a reminder of how volatile the stock can be, though. While some investors may want to rush to establish a position in AST SpaceMobile, a sharp correction may occur due to the valuation. It may be wiser to wait for a more favorable entry point.

Bank of America is an advertising partner of Motley Fool Money. Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.