AST SpaceMobile vs. GlobalStar? Which Stock Will Soar Higher?

The satellite connectivity market is an exciting place to invest in for risk-taking investors seeking explosive growth profiles. Undoubtedly, the satellite connectivity tech scene is still in its early days, but as the digital transformation shoots for the stars, I do think that early players in the space can capitalize on some pretty promising, emerging opportunities.

Indeed, direct-to-device internet connectivity (think the service offered by Elon Musk’s Starlink) may very well represent one of the next frontiers in mobile data tech. And while it’s costly and difficult to build a satellite network, I do think that a number of smaller, innovative firms are more than willing to step up to the plate to get the infrastructure where it needs to be to make satellite connectivity enter the mainstream. Indeed, it’s an exciting field that emerging growth investors may wish to keep watch on over the next three to five years.

In this piece, we’ll check out two promising, albeit speculative, names that are leading the charge in satellite connectivity. Let’s have a look at each to determine which name stands out for new investors looking to bet on the trend.

AST SpaceMobile

First up, we have  AST SpaceMobile (NASDAQ:ASTS), which has seen its stock gain more than 340% in the past year and over 1,400% in the past two years. Indeed, the firm went from being virtually unknown to becoming one of the hottest names in space. With a $20 billion market cap and some massive recent wins under its belt as the firm aims to team up to make direct-to-device satellite broadband connectivity a reality, it’s no mystery as to why traders are chasing the name higher.

Looking ahead, the firm will be moving forward with its ambitious plan to ramp up its satellite launches. Indeed, the company is going to be busy, and it’s moving fast, shooting to produce six satellites per month by the third quarter of this year. Indeed, it’s a very exciting time for the firm as it expands its reach.

Still, as is the case with any early hyper-growth stock, investors should prepare for intense volatility. After all, ASTS stock has a beta of 2.26 at the time of writing. And while the company’s second-half plans are ambitious, I can’t say I’m in a rush to chase down the stock as it goes into orbit. 

Bank of America analyst Michael Funk, who has a $55 price target, thinks the name is a “hold.” For now, I’m content sitting on the sidelines as those red-hot shares make their next move, as the magnitude of volatility is too much for my stomach. 

GlobalStar

GlobalStar (NASDAQ:GSAT) is another intriguing player in the space that’s perhaps best known for enabling connectivity on Apple (NASDAQ:AAPL) iPhones. The collaboration with Apple is a huge plus for GlobalStar, especially as it seeks more cash to expand its constellation.

In any case, GSAT shares have been far less impressive year to date, now down 18%. Indeed, it seems like the stock’s heyday was all the way back in 2021. And though some may perceive GlobalStar as a cheaper option to play the satellite connectivity boom, its growth profile may be less impressive to investors who want more of a fast mover. 

Indeed, for investors who want a hyper-grower that’s “flooring it,” AST SpaceMobile could be the more intriguing option to put on one’s watchlist. Of course, given where analysts stand with the name, perhaps waiting for more of a pullback could make sense for investors worried about the possibility of buying at the peak. For those seeking less choppiness, GSAT may be the name to go for, given its 0.91 beta, which actually makes it slightly less correlated to the S&P.

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