Bulls Say AST SpaceMobile Is a 10-Bagger. Bears Say It's Overhyped. Who's Right?

Battleground stocks have emerged in the space economy , and investors are taking sides -- nowhere more so than with AST SpaceMobile (NASDAQ: ASTS). The upstart satellite internet provider was at one point up 1,000% in the last five years, but it has recently slipped more than 50% from its highs.

Bulls think the innovative satellite internet provider can become a behemoth in telecommunications. Bears think that this is simply a pre-revenue company burning billions every year with a market cap of $24 billion.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Satellite internet has a massive addressable market, as illustrated by the growth of Space Exploration Technologies ' Starlink. Revenue was $4.3 billion for the SpaceX segment just last quarter, up 66% year over year, with strong profitability.

AST SpaceMobile envisions a world where it can improve on the customer value proposition Starlink has built. How? With high-speed internet beamed directly to smartphones. It plans to do this with large satellite arrays that can connect to computers on Earth without the need for a dish antenna to receive the signal. This could be revolutionary and help transition more of the hundreds of billions of dollars in wireless communications revenue generated worldwide each year.

The plan is to have this satellite constellation work with mobile carriers like Verizon to upsell customers high-speed satellite internet when they are outside Verizon's terrestrial network. The company is also working with the United States government for military connectivity applications.

Combined, once the satellite network is up and running, there could be billions in potential revenue in the United States and tens of billions internationally. This is the bull case investors in the stock see right now, even though the trailing revenue is close to zero.

Bears look at trailing financials and capital intensity

Where bears start to argue against AST SpaceMobile is that the timeline for commercialization keeps getting pushed further and further out. The new timeline for debuting the satellite constellation for commercial use is the first half of 2027, rather than later this year. This has occurred because it cannot get rocket launch providers -- including its competitor SpaceX -- to launch its satellites into orbit as quickly as it wants.