Why AST SpaceMobile Stock Jumped Today
Shares of AST SpaceMobile (NASDAQ: ASTS) rallied as much as 8.4% early Thursday, then settled to close up 1.4% after the satellite designer and manufacturer reached a significant milestone in its efforts to build the world's first space-based cellular broadband network accessible by everyday smartphones.
AST readies a first-of-its-kind network
In a press release late Wednesday, AST SpaceMobile announced it has commenced the "tape-out phase" for its Application-Specific Integrated Circuit (ASIC) in collaboration with Taiwan Semiconductor Manufacturing (NYSE: TSM). In semiconductor manufacturing, the tape-out phase is a critical process that marks the transition from design to actual production.
"As we advance toward the orbital launch of our Block 1 BlueBird satellites in the upcoming months, we are simultaneously making steady progress on the technology underlying our Block 2 satellites," explained AST SpaceMobile Chairman and CEO Abel Avellan. "[...] With the ASIC at the heart of our Block 2 program, we are a big step closer to ushering in a new era of satellite communications, helping to empower people with reliable connectivity, regardless of their location."
What's next for AST SpaceMobile shareholders?
Indeed, AST has spent the past four years in dedicated R&D and engineering, investing $45 million in development for its AST5000 ASIC. The novel, low-power architecture was designed to enable a high-bandwidth, space-based satellite network that will be accessible by everyday smartphones for both commercial and government use. AST has agreements in place with more than 40 mobile network operators around the world totaling over 2 billion subscribers.
This tape-out phase won't translate to immediate revenue generation for AST SpaceMobile, of course, but it marks an important milestone for the company as it finally begins to bring its semiconductor designs to life. With AST SpaceMobile shares down around 40% year to date as of this writing, spurred in part as the company had to raise cash earlier this year through a dilutive public share offering, it's no surprise to see shares of the space stock attempting to rebound in response.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Why AST SpaceMobile Stock Jumped Today was originally published by The Motley Fool
