ASTS Stock Rally Puts Japan Satellite Subsidy and Launches Cadence into Focus

The roller coaster ride continues in the AST SpaceMobile NASDAQ: ASTS shareholders.

After space stocks took a hit after SpaceX NASDAQ: SPCX IPO in June, AST SpaceMobile rewarded patient investors with its best daily performance in two years.

Shares of the Midland, Texas-based space-based direct-to-device (D2D) mobile broadband provider rose 21% on Monday, June 29, to close the second quarter on a strong note. This was a welcome relief after a month when the market punished ASTS despite the successful launch of its Earth orbit (LEO) BlueBird 8, 9, and 10 satellites.

The catalyst for this week's biggest jump was Japan's plan to give up to 148 million yen (about $912 million) to a satellite communications project led by Rakuten. OTCMKTS: RKUNY. That put AST SpaceMobile's Rakuten relationship back in the spotlight while raising hopes for a major D2D rollout in Japan.

Japan Announces Space-Based Telecom Funding

Motivated by concerns that critical communications infrastructure is becoming too dependent on foreign satellite networks such as SpaceX's Starlink, Japan is using the Japan Low Earth Orbit Satellite Communications Project (J-LEO) to support a more robust domestic alternative.

The program is expected to focus on satellite communications in remote areas, disaster response, and emergency communications, giving the Rakuten-led effort strategic importance beyond the standard commercial telephone rollout.

According to the Japan Times, Japan's Ministry of Internal Affairs and Communications received funding for J-LEO through 2025, but the tender process was not completed until last month. This plan calls for significant investment in the construction of a domestic D2D satellite network over the next three years.

Aside from the funding news, Rakuten has announced plans for a joint venture with AST SpaceMobile that will ensure full regulatory approval of D2D operations in Japan. The first commercial services are expected to begin later in 2026, with full rollout planned for 2027.

This step can be useful for AST SpaceMobile. Having about $1 billion in government-backed capital would give the company a clear template for monetizing its technology through corporate partnerships and government-backed global networks.

Launch Window Set for BlueBirds 11, 12, and 13

After the successful June launch of its three latest satellites, AST SpaceMobile says it intends to launch BlueBirds 11, 12, and 13 from Cape Canaveral, Florida, in the first half of August. That will go a long way toward keeping the company on track to meet its goal of putting 45 LEO satellites into orbit by the end of 2026.

“These next-generation satellites are expected to deliver nearly double the data speed of AST SpaceMobile's first Block 1 BlueBird satellites, which recently achieved a maximum download speed of 98.9 Mbps directly to standard smartphones,” according to the company's latest report.

By 2026, the company is aiming to build 45 to 60 satellites, which it will need to provide continuous coverage to the United States and Japan. That number will need to increase to provide continued global coverage, with approximately 90 BlueBirds needed.

Ultimately, AST SpaceMobile can have up to 248 satellites to expand its network, increase its data capacity, and support a large global customer base. However, the company has discussed a long-term plan that could include 540 dual-use satellites over the next decade.

Despite Catalysts, Wall Street Remains Tepid

Despite the news and subsequent price action, the jury is still out on the AST SpaceMobile.

In Q2, the stock saw a series of less than encouraging ratings. On May 29, William Blair reissued a Market Perform rating on ASTS, while Wall Street Zen lowered its rating from Sell to The Strong Sell on April 15.

On May 12, the B. Riley Financial raised its price target for ASTS from $75 to $85; However, the company assigned a neutral rating to the stock. Also on May 12, UBS Group lowered the price target from $85 to $80, while in a research note dated June 24, Weiss Ratings reiterated its Sell rating.

Based on the 10 analysts currently covering ASTS, the stock receives a consensus Reduce rating, with a 12-month price target implying about a 4% upside from current levels. Meanwhile, current short interest stands at 20.35% of the concern's float, or approximately 62.5 million shares with a value of $5.47 billion.

However, AST SpaceMobile has agreements with nearly 60 mobile network providers worldwide, including more than 3 billion subscribers, and a strategic partnership with AT&T. NYSE: TVerizon NYSE: VZVodafone NASDAQ: VODRakuten, Alphabet NASDAQ: GOOGLand real estate investment trust American Tower NYSE: AMTamong others.

Long-term, the company should continue to enjoy top-line growth that translates into solid profits for patient investors.

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