Why AST SpaceMobile Shares Popped On Monday

AST SpaceMobile (ASTS 1.92%) stock is moving again on Monday. Today’s gain is about 2.3% as of 12:20 p.m., although the stock is moving around quite a bit, and if you blink, it could just as easily go down as it does up.

Credit for today’s turmoil goes to Scotiabank analyst Andres Graham, who this morning raised his price target on AST shares from $28 to $45.90 — a very accurate assessment of a stock that’s not particularly easy to assessed (because it has no profit).

What Scotiabank likes about AST SpaceMobile stock

Graham denies that his new price target is related to any “short-term trading opportunity” in AST. He takes the long view, arguing that AST has superior satellite technology that could one day make it “the world’s largest wireless company by subscribers.”

(If that prediction sounds familiar, it should. At the time AST hyped its IPO, the company boasted that it was targeting “five billion mobile subscribers” in a “$1 trillion global mobile services market.”

According to Graham, AST technology is so well, with an estimated peak data rate of up to 120 megabits per second per satellite, it’s even better than SpaceX’s Starlink.

Is AST stock a buy?

Graham says AST’s faster data rates (which Starlink would likely contest) and greater beam accuracy mean SpaceX may have to completely redesign its satellites to compete. This could prove quite tricky, as SpaceX already has more than 6,200 Starlink satellites in orbit.

Perhaps even more exciting to investors today is Graham’s suggestion that SpaceX may decide to buy AST SpaceMobile. With AST’s stock currently sitting at $9 billion and SpaceX being valued at well over $200 billion, this isn’t entirely out of the question. SpaceX could easily afford to buy AST.

I wouldn’t bet on that happening, though. After all, Starlink is profitable and AST is not. I’d rather own part of a profitable Starlink IPO than unprofitable AST stock.