Why AST SpaceMobile Stock Popped on Wednesday

As earnings day approaches, satellite communications startup AST SpaceMobile (NASDAQ: ASTS) made an exciting announcement on Wednesday. The company disclosed that it has secured a $43 million subcontract as part of a contract with the U.S. Space Force.

The stock of AST SpaceMobile saw a significant increase of 16.7% by 10 a.m. ET following this news.

Details of the Award

AST SpaceMobile has been somewhat discreet about the details of this contract. The management confirmed that the award size is $43 million. Their responsibility will be to assist the United States Space Development Agency (SDA), which is an integral part of the U.S. Space Force, through a prime contractor relationship.

AST emphasized that the contract is intended to enhance the delivery of essential space-based capabilities for the joint warfighter. The company hinted that this new contract is connected to their prior successes with the BlueWalker-3 satellite, which was successfully tested in orbit under a contract announced in February 2024. Therefore, this deal likely pertains to providing direct-to-cell communications services.

The contract is tied to the Space Force's Proliferated Warfighter Space Architecture (PWSA) program. However, AST chose not to reveal the identity of the prime contractor for whom they are subcontracting.

Potential Clients of AST SpaceMobile

While the specifics about AST's customer in this contract remain undisclosed, there are several companies that could potentially be involved. The Space Development Agency has awarded prime contracts to major defense firms, including:

• L3Harris (LHX)
• Lockheed Martin (LMT)
• Northrop Grumman (NOC)
• Rocket Lab (RKLB)
• RTX (RTX)
• SpaceX
• York Space Systems

Additionally, the SDA has classified several other companies as eligible to bid for work related to an offshoot of the PWSA, known as the Hybrid Acquisition for Proliferated Low Earth Orbit (HALO) program. There is an overlap between the companies involved in both PWSA and HALO, suggesting that AST's new $43 million contract could be linked to one of these firms.

Investors and analysts may gain a clearer understanding of AST SpaceMobile's collaborations when the company releases its Q4 earnings report after the market closes on Monday, March 3.

ASTSpaceMobile, Earnings, Satellite