This Starlink Competitor Is Positioned to Test Highs With Catalysts at Hand
Here's why this stock is on my radar for an additional buy.
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A gap-up open on Monday morning is very tough to trust when the primary catalyst is cryptocurrencies. While a U.S. strategic fund for Bitcoin and other cryptocurrencies is a positive for that industry, it doesn't do much for the stock market, which is struggling with the uncertainty of tariffs and economic conditions.
Constructing spending and ISM manufacturing data that was released at 10 a.m. ET was below expectations and gives further weight to concerns about the economy. Even more worrisome is that prices paid are the highest since June 2022. Bonds rallied on the news but are still lower than on Friday.
The market has been under steady selling pressure since the open. One of the bigger negatives is weakness in Nvidia NVDA, which had a brief rebound on Friday but is giving it all back on Monday. The Magnificent Seven MAGS and small-caps IWM are both struggling.
The problem is that the market lacks clarity about tariffs and the economy and, therefore, can not discount the potential bad news. There isn't much to do other than wait for more news flow before jumping.
One name that is on my radar for an additional buy is AST SpaceMobile ASTS, which reports earnings on Monday night. This Midland, Texas-headquartered company designs and manufactures satellites and is creating the first space-based cellular broadband network.
The network will provide 4G/5G connectivity directly to standard smartphones without requiring modifications. This will address gaps in coverage in remote areas, at sea, and in the air. ASTS's BlueBird satellites essentially act as space-based cell towers and will enable high-speed data services globally.
The company has partnered with major telecom providers such as AT&T T, Verizon VZ, and Vodafone VOD. On Monday, March 3, ASTS and Vodafone announced an agreement to create SatCo, a jointly-owned European satellite service business that serves mobile network operators in all European markets. SatCo will provide 100% geographic coverage in every part of Europe, giving consumers and businesses access to secure space-based cellular broadband connectivity.
ASTS competes against Elon Musk's Starlink, but currently is leading the race. ASTS has several advantages. It proves a direct connection to standard smartphones with no additional equipment. ASTS has signed agreements with over 35 mobile network operators globally, including AT&T and Verizon, in the U.S., allowing for easier integration and wider adoption. By acting as a wholesaler, ASTS can serve a large number of operators, potentially giving it an edge in scaling and adoption compared to Starlink's direct-to-consumer model.
ASTS supports low-band frequencies (700 MHz for AT&T, 850 MHz for Verizon) that Starlink's current antennas do not support, which is helping to win partnerships with major carriers. ASTS has reportedly made more progress in the regulatory process, obtaining approval to test full 5G broadband in Europe, Turkey, and the U.S., while Starlink has only received approval for testing text messages. ASTS has achieved 20 Mbps download speeds and 5G calls in tests and is working on improving speed.
The company has earnings due on Monday after the market close and should have much to stay about its operational progress. ASTS is moving quickly and has some major partners, which will lead to substantial revenue fairly quickly.
Technically, the stock is breaking a small downtrend and is positioned to test recent highs if it can gain momentum on the earnings call. I'm aggressively trading around a core position.
At the time of publication, Rev Shark was long ASTS.
