Why AST SpaceMobile Stock Soared Today
Key Points
Artificial intelligence (AI) chatbots have people using smartphones more than ever.
Now AST SpaceMobile looks to have another revenue stream beyond those smartphone users.
The company was named as a prime contractor for a U.S. defense project.
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The onset of artificial intelligence (AI) applications gives people even more reasons to be glued to their smartphones. Broadband connectivity is more important than ever. AST SpaceMobile (NASDAQ: ASTS) is launching satellite arrays to provide that connectivity from low orbit satellites.
That's not exactly why AST stock soared as much as 19% today, though. In addition to providing global consumers with satellite internet access, the company was now named as a primary contractor for a U.S. national security program. As of 1:21 p.m. ET, AST shares were still trading up by 16.8% on the news.
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A big government contract
Investors likely haven't been thinking of AST SpaceMobile as a potential government contractor. The company has been focused on providing its low-Earth satellite broadband system to consumers and businesses worldwide. The company wants to provide service to standard smartphone users, including those who are currently unconnected to the internet.
Today, however, the company announced it is now also a prime contractor for the Missile Defense Agency's SHIELD initiative. That's part of the better-known Golden Dome multi-layer missile defense system proposed for the U.S.
Chris Ivory, AST SpaceMobile's chief commercial officer, stated, "Our innovative low-Earth orbit (LEO) satellite architecture, featuring the largest commercial phased arrays ever deployed in low Earth orbit, is inherently scalable and resilient."
Last month, the company successfully launched its BlueBird 6 satellite array. It was the largest commercial communications constellation ever deployed into low Earth orbit. With a path to also monetize its satellite constellation for government projects, investors are bidding up shares of AST SpaceMobile today.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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