Why AST SpaceMobile Stock Is Soaring Today

AST SpaceMobile (NASDAQ: ASTS) stock is surging in Friday's trading. The space-tech company's share price was up 9.2% as of 2 p.m. ET, while the S&P 500 index and the Nasdaq Composite index were up 1.2% and 1.7%, respectively.

AST SpaceMobile stock is gaining ground in conjunction with bullish momentum for the broader market and excitement surrounding SpaceX's scheduled rocket launch tonight. Even though the two companies are competitors, investors are viewing wins for SpaceX as a bullish indicator for the broader space industry.

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AST SpaceMobile stock gets a lift from SpaceX

SpaceX, which is led by Tesla CEO Elon Musk, is scheduled to carry out its first rocket launch of the year today at 8:27 p.m. ET. The launch will take place out of Florida's Cape Canaveral Space Force Station and is being conducted to launch a Thuraya 4 spacecraft for Space42 -- a space technologies company that operates out of the United Arab Emirates. After being launched into orbit, the Thuraya 4 craft will be used to provide mobile communications services from Space42 to Europe, Africa, and the Middle East.

While SpaceX is the leader in many categories of the emerging commercial space industry, it doesn't have publicly traded stock. That means investors who are looking for exposure to this potentially explosive growth market have to put their money behind other companies in the category -- and AST SpaceMobile stock is benefiting from this dynamic today.

What comes next for AST SpaceMobile?

In terms of rocket launches and satellite deployments, AST SpaceMobile is significantly behind SpaceX. With a market cap of roughly $4.7 billion, AST is also valued at roughly 66 times this year's expected sales -- a highly growth-dependent valuation that sets the stage for downside risk if its performance comes in below expectations.

On the other hand, AST still has a forefront position in a category that is still at an extremely nascent growth stage. There are enough opportunities in the rapidly expanding space industry to support multiple winners, and the company's big investments in this new technological frontier have the potential to open up new growth paths and deliver big wins. So while the stock is a high-risk play at current prices, it still has the potential to deliver explosive long-term returns.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.