Why AST SpaceMobile Stock Skyrocketed 102.6% Last Month, but Has Slipped in July

Key Points

• AST SpaceMobile stock roared to a new record high last month thanks to multiple bullish catalyts.

• Positive momentum for the broader market, business-specific news, and analyst coverage contributed to the stock's rally.

• AST SpaceMobile stock has seen a mild pullback early in this month's trading.

• 10 stocks we like better than AST SpaceMobile ›

AST SpaceMobile (NASDAQ: ASTS) stock recorded huge gains across June's trading. The space technology company's share price surged 102.6% in a month that saw the S&P 500 (SNPINDEX: ^GSPC) rise 5% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jump 6.6%.

Excitement surrounding defense technology plays and bullish momentum for the broader market helped AST stock close out the period with huge gains. New partnership announcements, investment speculation, and analyst coverage also helped power the rally.

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AST SpaceMobile stock had an incredible rally last month

June was a month of massive bullish momentum for space tech stocks, and investors piled into AST stock on some promising growth indicators for the company. Along those lines, the stock got a significant boost on June 4 after Scotiabank highlighted the possibility that Jeff Bezos and his Blue Origin space exploration company could invest in AST.

On June 16, B. Riley published new coverage maintaining a buy rating on AST. The investment firm also raised its one-year price target on the stock from $36 per share to $44 per share and pointed to the space-tech specialist's growing spectrum resources as a catalyst that could help support further valuation growth.

AST and Vodafone then announced on June 18 that they had entered into a new partnership to bring connectivity offerings to untapped markets in India. The two companies' collaboration on the SpaceMobile Satellite System could bring space-based cellular broadband services to a huge section of new customers, and it looks like foundations are being laid for the business to scale rapidly. Along with moves to clarify and expand its spectrum access last month, the expansion of the partnership with Vodafone strengthened AST's long-term performance outlook.

Why has AST stock pulled back in July?

On the heels of last month's explosive gains, AST stock has seen a modest pullback in July's trading. The company's share price is down roughly 3.5% in the month as of this writing, but it's still up 264% over the last year.

There actually haven't been any negative, business-specific developments for the company this month, but investors are showing some signs of valuation concerns after a massive valuation run-up.

On the other hand, Roth Capital published new coverage on AST on Monday -- reiterating a buy rating and raising its one-year price target on the stock from $42 per share to $51 per share. Roth's analysts see recent wins for T-Mobile's Starlink-enabled services are a positive indicator because it views AST's service and pricing offerings as superior.

With signs of strong competitive positioning, some analysts and investors are betting the stock will soon go on to reach new highs. AST remains a high-risk, reward play, but the company is executing at a high level and has some huge growth opportunities ahead.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia, T-Mobile US, and Vodafone Group Public. The Motley Fool has a disclosure policy.