A lot has been made of the IPO from Space Exploration Technologies. Indeed, the current price of SpaceX shares means the company has a whopping $2.05trn market cap. However, after some thought, I’ve decided the company is overvalued; there are other options available. Here’s one that looks appealing to me.
To infinity and beyond
I’m talking about AST SpaceMobile (NASDAQ:ASTS). To be clear, AST isn’t trying to launch more rockets or sell satellite dishes. Instead, it wants to turn ordinary smartphones into satellite-connected devices. The company is building a constellation of large low Earth orbit satellites designed to beam cellular broadband directly to smartphones. This will allow people to connect where traditional signal towers cannot reach.
So it is still a space-sector stock, but in some ways a bit lower-risk than SpaceX and other peers. AST has signed agreements with major telecom operators already, with pending revenue-sharing deals set to offer customers coverage in rural and remote locations.
Q1 2026 results showed modest revenue of $14.73m, but maintained its full-year revenue guidance of between $150m and $200m. With the target of approximately 45 satellites in orbit by the end of 2026, things are starting to get exciting.
The relative appeal
Don’t get me wrong, space as a sector is high risk. However, what I like about AST is the size of the opportunity. Billions of people still experience unreliable mobile coverage. If AST can make satellite connectivity seamless, the addressable market could be enormous.
When I compare it to SpaceX’s Starlink, there’s a clear difference. SpaceX’s Starlink is a phenomenal business, but AST is targeting existing cellular networks rather than trying to replace them. Starlink generally requires dedicated hardware, while AST will connect phones that people already own. That could make adoption much easier if the technology works at scale.
Further, with a market cap of just over $28bn, it has the legs to move much higher than SpaceX.
Valid concerns
AST is still a long way from proving it can become a highly profitable company. Building and launching satellites is extremely expensive, and the company will need billions in capital before the network is fully deployed.
Further, the stock is up 37% in the past year, but down 39% in the past month. It’s a highly volatile stock, which might put off some investors. However, for those who want exposure to this sector and are happy with the risk level, I think it’s a more appealing purchase to consider than SpaceX right now. I believe it has more scope to rally as the space theme takes off, and huge potential to connect with existing providers at a rapid rate. That’s why I’m seriously thinking about buying a small amount of stock.
Should you invest £5,000 in AST SpaceMobile right now?
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Jon Smith has no positions in the shares mentioned.
