What does AST SpaceMobile do?

Stock prices of AST SpaceMobile (ASTS -0.72%) have skyrocketed by about 460% since the beginning of the year. To say the growth stock has attracted considerable investor interest would be an understatement. But while onlookers might be impressed by the stock’s meteoric rise, many are still wondering what exactly the company is doing.

Let’s take a closer look at the AST SpaceMobile to see what has the market so excited.

The ABCs of AST SpaceMobile

In the early stages of its development, AST SpaceMobile describes itself as a company “building the first and only space-based cellular broadband network.” It is no small effort. To provide this service, AST SpaceMobile must perform several tasks.

For example, the company needs to attract telecom partners and has achieved success here. Most recently, AST SpaceMobile signed a commercial agreement with AT&Twhich the companies say will “deliver the first broadband space network directly to everyday mobile phones”.

Earlier this year, AST SpaceMobile reported an investment from Alphabet and Vodafone (as well as AT&T). Speaking on the merits of the deal, Vodafone CEO Margherita Della Valle said “Vodafone’s investment and collaboration with AST SpaceMobile will help make our mobile connectivity services available everywhere for our customers in Europe and Africa”.

Additionally, AST SpaceMobile is working on deploying its satellites into low Earth orbit. A big step toward making that happen next month, as the company plans to launch its first five commercial satellites into space.

Is AST SpaceMobile a good stock to buy now?

There’s no denying that telcos are taking AST SpaceMobile seriously. The company claims to have signed agreements with more than 45 mobile network operators worldwide, representing more than 2.8 billion existing subscribers.

However, potential investors should understand that there are plenty of risks involved — especially given that the company isn’t generating organic cash right now. Developing a network of satellites to provide cellular broadband services in space will not be easy. Potential investors should be comfortable with a higher degree of risk here than your average stock.