By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel consensus is that ASTS's high valuation is not justified by its execution risk, dependence on SpaceX, and unproven business model. While spectrum arbitrage is a potential opportunity, it's not a guaranteed moat due to regulatory and commercial adoption risks.
Risk: Execution risk, dependence on SpaceX, and unproven business model
Opportunity: Spectrum arbitrage, if successfully implemented
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
SpaceX’s IPO is driving many investors to raise cash by selling other stocks.
Is it time to take profits in AST and invest in its bigger industry peer?
SpaceX, the aerospace and AI company founded by Elon Musk, will go public on June 12. It could raise $75 billion at a valuation of $2 trillion, making it the biggest IPO in history.
Many investors are selling other stocks to free up cash to buy SpaceX's shares. However, one stock that resisted that sell-off was AST SpaceMobile (NASDAQ: ASTS), which operates in the same satellite internet services market as SpaceX's Starlink.
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Instead, AST's stock rallied more than 30% this year as SpaceX's looming IPO lifted most space stocks. Should investors take profits in AST today to buy more shares of SpaceX?
AST and SpaceX's Starlink both operate Low Earth Orbit (LEO) satellites that provide internet connectivity to areas where terrestrial cellular towers can't reach. However, the two companies operate different business models.
AST helps telecom giants like AT&T and Verizon directly connect their mobile devices to its satellites, but it doesn't provide its own internet service. Starlink offers its own satellite internet service, which requires a dedicated dish, but it also helps telecom companies like T-Mobile add satellite services to their smartphones.
AST processes its cellular data on the ground through its Radio Access Network (RAN) software, while its satellites function as repeaters. Starlink processes most of its cellular data directly in its satellites. Therefore, AST can upgrade its networks to new cellular technologies (such as 6G) from the ground, whereas Starlink needs to replace its physical satellites.
AST has only launched seven satellites so far, while Starlink has launched over 12,000 satellites (more than 10,000 of which are still active). However, AST's satellites are much larger (with 693 to 2,400 sq ft arrays) than Starlink's satellites (with 65 to 125 sq ft arrays).
AST plans to have 45 to 60 satellites in orbit by the end of 2026, and up to 248 satellites over the next few years. Starlink plans to expand its constellation to 42,000 satellites. There could be plenty of room for both companies to grow, since they mainly serve different markets.
SpaceX has several advantages over AST. It's much bigger, and it controls Starlink's entire production pipeline through its space division's orbital rockets and its AI division's software. Starlink is also profitable on its own, while AST remains unprofitable.
In 2025, SpaceX's revenue rose 33% to $18.7 billion, and it generated a net profit of $791 million, with Starlink's profits offsetting its space division's losses. But after it integrated xAI (which also owns X) into its business to launch its new AI division this May, it recast those results -- and it ended up with a staggering net loss of $4.9 billion in 2025. That cash-burning AI segment will remain a dead weight on its bottom line as it expands its infrastructure.
With a $2 trillion market debut, SpaceX would trade 107 times its 2025 sales. AST SpaceMobile looks even pricier at 288 times last year's sales -- but that's because it only launched its first commercial satellites in late 2024.
That's why AST's revenue surged 1,505% to $71 million in 2025. Its net loss widened from $300 million to $342 million, but it isn't burdened by money-losing rocket and AI divisions. Instead, it relies on SpaceX's Falcon rockets to carry its BlueBird (BB) satellites into orbit.
If SpaceX grows its top line at a 30% CAGR from 2025 to 2028, its revenue would reach $41.1 billion by the final year. At $2 trillion, it would trade at 49 times that estimate.
As for AST, analysts expect its revenue to grow at a 198% CAGR from 2025 to 2028, reaching $1.9 billion by the final year. At its current market cap of $28 billion, it trades at 15 times that estimate, making it seem more reasonably valued than SpaceX.
Analysts also expect AST to turn profitable in 2027 and 2028 as economies of scale kick in. SpaceX will likely struggle to break even as its AI and space losses erase Starlink's profits.
Based on these facts, I don't think investors should sell their AST shares to buy SpaceX. SpaceX will inevitably pull back after its red-hot market debut, so there's no reason to chase it when AST still looks reasonably valued relative to its long-term growth potential.
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Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"ASTS’s valuation is less about revenue multiples and more about its ability to maintain launch independence from its primary competitor, SpaceX."
The article presents a false dichotomy between ASTS and a hypothetical SpaceX IPO. At a $2 trillion valuation, SpaceX is priced for perfection, essentially pricing in the total dominance of the global satellite and AI compute market. ASTS, while speculative, offers a pure-play 'Direct-to-Cell' infrastructure model that avoids the massive capital expenditures of rocket manufacturing. However, the article ignores the existential 'launch risk'—ASTS is entirely dependent on competitors like SpaceX for orbital deployment. If SpaceX restricts access or hikes launch costs, ASTS’s path to profitability evaporates. Investors should focus on the regulatory moat and spectrum licensing, not just revenue growth multiples.
ASTS is essentially a 'vendor' to the telcos, whereas SpaceX owns the entire stack—launch, hardware, and network—making ASTS vulnerable to being squeezed out of the value chain entirely.
"AST's valuation assumes 198% revenue CAGR and 2027 profitability with only 7 satellites deployed and no proof of carrier preference over Starlink's integrated model."
The article's valuation math is misleading. Yes, AST trades at 15x 2028E revenue vs. SpaceX at 49x, but that assumes AST hits $1.9B revenue and profitability by 2028—neither guaranteed. AST has launched only 7 of 45-60 planned satellites; execution risk is massive. More critically, the article ignores that SpaceX's $4.9B 2025 loss includes xAI integration noise—Starlink alone was profitable. AST's 198% CAGR projection requires flawless deployment, telecom partner adoption, and no competitive pressure from Starlink's own telecom offerings (T-Mobile deal). The article also omits that SpaceX controls its supply chain; AST depends on Falcon 9 availability and pricing.
If AST executes flawlessly and telecom carriers genuinely prefer its ground-based RAN model over Starlink's satellite processing, the 15x multiple on 2028E revenue could be justified—but the article provides zero evidence of carrier preference or binding commitments beyond AT&T/Verizon pilots.
"ASTS's aggressive growth projections hinge on flawless scaling that its current seven-satellite fleet and launch dependencies make highly uncertain."
The article's valuation comparison favors ASTS at 15x 2028 revenue versus SpaceX at 49x, but glosses over ASTS's extreme execution risk: only seven satellites launched versus Starlink's 12,000, total reliance on SpaceX rockets, and unproven ability to scale to 248 units while generating $1.9B revenue. SpaceX's vertical integration and proven cash flow from Starlink provide a buffer that ASTS lacks, especially with its widening losses and ground-based RAN model still needing spectrum deals and regulatory approvals to monetize.
If ASTS secures additional spectrum partnerships and hits its 45-60 satellite target by end-2026 without delays, the 198% CAGR could materialize and justify the premium over SpaceX's slower but steadier growth.
"AST SpaceMobile’s carrier-backhaul optionality could deliver meaningful upside even if ASTS’s top line remains modest, so SpaceX IPO hype should not crowd out due diligence on ASTS’s long-run leverage."
SpaceX’s IPO hype could draw capital, but ASTS sits on a distinct optionality: wholesale satellite backhaul via RAN software, potentially monetizing 6G/IoT with carriers rather than selling consumer service. If AT&T/Verizon scale those wholesale links, ASTS could expand margins even as top-line grows slowly. The article glosses over concentration risk (few customers) and the long capex/launch cadence that drags profitability. It also assumes SpaceX’s IPO is a straightforward profit engine; in reality Starlink remains capital-intensive with rapid opex growth tied to launches and AI costs. So the obvious reading that you must sell AST to buy SpaceX misses ASTS’s optionality and SpaceX’s execution risk on a private, hype-heavy IPO.
SpaceX could still surprise on profitability and scale, keeping the IPO pop intact and ASTS from gaining ground. Even if ASTS is optionality-driven, execution risk and a slow carrier ramp could cap its upside.
"ASTS's true value lies in its ability to act as a spectrum aggregator for telcos, which is a fundamentally higher-margin model than SpaceX's capital-intensive ISP approach."
Claude and Grok are fixated on launch cadence, but you're all ignoring the spectrum arbitrage. ASTS isn't just selling hardware; they are monetizing underutilized terrestrial spectrum via satellite. This is a regulatory play, not just a rocket play. If they successfully clear the FCC hurdles for 850MHz, they become a high-margin spectrum aggregator. SpaceX's Starlink is a hardware-heavy ISP; ASTS is a software-defined infrastructure layer. The valuation gap isn't just about execution; it's about business model scalability.
"Spectrum licensing is a necessary condition for ASTS upside, not sufficient—carrier adoption and regulatory timing remain the binding constraints."
Gemini's spectrum arbitrage angle is real, but conflates two separate risks. FCC approval for 850MHz is binary—either it clears or it doesn't—and the article provides zero evidence of timeline or probability. More critically, even if ASTS secures spectrum, monetizing it requires carrier adoption at scale. Claude's point about binding commitments beyond pilots still stands. Spectrum optionality doesn't de-risk execution; it just shifts the bottleneck from launch cadence to regulatory + commercial adoption.
"Spectrum approval is the gating item that turns ASTS's commercial model on or off, beyond launch execution."
Claude treats spectrum clearance as an isolated binary event, yet it directly gates the wholesale RAN backhaul optionality that lets ASTS monetize carrier spectrum without owning hardware. If 850MHz fails or delays, the slow capex cadence already flagged becomes terminal because no spectrum means no scaled revenue to offset launch costs. This regulatory hinge is more binding than satellite count alone.
"Spectrum arbitrage is not a guaranteed moat; binding carrier commitments and regulatory timelines are the gating factors, making this optionality uncertain."
Gemini, spectrum arbitrage is not a free moat. Even with 850MHz clearance, ASTS must secure multi-year wholesale commitments from carriers, navigate provisioning cycles, and absorb capex while Starlink and other players chase similar backhaul options. The FCC binary outcome is real, but the bigger risk is commercial adoption and pricing. Until ASTS proves signed, revenue-generating deals beyond pilots, the spectrum angle remains speculation, not a moat.
The panel consensus is that ASTS's high valuation is not justified by its execution risk, dependence on SpaceX, and unproven business model. While spectrum arbitrage is a potential opportunity, it's not a guaranteed moat due to regulatory and commercial adoption risks.
Spectrum arbitrage, if successfully implemented
Execution risk, dependence on SpaceX, and unproven business model