AST SpaceMobile Nears Commercial Launch: Is It Time To Buy The Dip?

AST SpaceMobile (NASDAQ: ASTS) has an interesting business model. The company aims to compete with Space Exploration Technologies' (NASDAQ: SPCX) Starlink service, but it has gone down a very different path. While the planned launch of AST SpaceMobile's commercial service has been pushed back to early 2027, it could get off to a big start. Here's what you need to know.

Going it alone versus partnering up

Starlink is the most profitable business unit within SpaceX, as the company's IPO prospectus revealed. Once again, Elon Musk's vision has resulted in a company he controls getting in early on an investment opportunity. However, other companies are looking to break into the market for satellite-based cellular broadband communications, including AST SpaceMobile. Starlink was so early that it basically had to develop its own, direct-to-consumer technology and services. AST SpaceMobile is partnering with cellphone companies.

Image source: Getty Images.

This is a major point of differentiation. Not only does AST SpaceMobile have deals with companies that can help fund its expansion, but it also has a built-in customer base. Essentially, customers of cellphone providers like AT&T (NYSE: T) and Verizon (NYSE: VZ) can add AST SpaceMobile's service to their existing plans once it's up and running.

A $1 billion opportunity

In the first quarter of 2026, AST SpaceMobile generated revenues of around $15 million. Most of that came from contracts with the U.S. government, which also wants access to the company's satellite network. However, after launching its commercial service, the company believes it can generate up to $1 billion in revenue in 2027.

Strong execution will be vital for this space stock. It still has to build and launch more satellites to get its service up and running. And even after it begins operating its service in limited markets, it still has more to do if it wants to cover the entire globe. Investors aren't as enthusiastic about the company's prospects as they were, noting that the stock is in the middle of a nerely 60% drawdown right now.

Hitting the ground running

As a money-losing start-up, that's actually not shocking. Only the most aggressive investors should consider AST SpaceMobile right now. That said, if the company can go from $15 million in quarterly revenue to an annual run rate of around $1 billion as quickly as it believes it can, Wall Street will likely reward it with a higher price once it starts selling its service to consumers.

Only the proof of that ability, driven by its partnership-based model, won't come until the company actually launches its service. Most investors should probably watch from the sidelines until the service is up and running. More aggressive types, however, may see this dip as an opportunity to jump aboard a business that is likely to hit the ground running when it eventually launches.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.