Should You Sell AST SpaceMobile to Buy SpaceX at IPO?

Written by Leo Sun for The Motley Fool->

SpaceX’s IPO is driving many investors to raise cash by selling other stocks.

Is it time to take profits in AST and invest in its bigger industry peer?

SpaceX, the aerospace and AI company founded by Elon Musk, will go public on June 12. It could raise $75 billion at a valuation of $2 trillion, making it the biggest IPO in history.

Many investors are selling other stocks to free up cash to buy SpaceX's shares. However, one stock that resisted that sell-off was AST SpaceMobile (NASDAQ: ASTS), which operates in the same satellite internet services market as SpaceX's Starlink.

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Instead, AST's stock rallied more than 30% this year as SpaceX's looming IPO lifted most space stocks. Should investors take profits in AST today to buy more shares of SpaceX?

AST and SpaceX's Starlink both operate Low Earth Orbit (LEO) satellites that provide internet connectivity to areas where terrestrial cellular towers can't reach. However, the two companies operate different business models.

AST helps telecom giants like AT&T and Verizon directly connect their mobile devices to its satellites, but it doesn't provide its own internet service. Starlink offers its own satellite internet service, which requires a dedicated dish, but it also helps telecom companies like T-Mobile add satellite services to their smartphones.

AST processes its cellular data on the ground through its Radio Access Network (RAN) software, while its satellites function as repeaters. Starlink processes most of its cellular data directly in its satellites. Therefore, AST can upgrade its networks to new cellular technologies (such as 6G) from the ground, whereas Starlink needs to replace its physical satellites.

AST has only launched seven satellites so far, while Starlink has launched over 12,000 satellites (more than 10,000 of which are still active). However, AST's satellites are much larger (with 693 to 2,400 sq ft arrays) than Starlink's satellites (with 65 to 125 sq ft arrays).

AST plans to have 45 to 60 satellites in orbit by the end of 2026, and up to 248 satellites over the next few years. Starlink plans to expand its constellation to 42,000 satellites. There could be plenty of room for both companies to grow, since they mainly serve different markets.

SpaceX has several advantages over AST. It's much bigger, and it controls Starlink's entire production pipeline through its space division's orbital rockets and its AI division's software. Starlink is also profitable on its own, while AST remains unprofitable.

In 2025, SpaceX's revenue rose 33% to $18.7 billion, and it generated a net profit of $791 million, with Starlink's profits offsetting its space division's losses. But after it integrated xAI (which also owns X) into its business to launch its new AI division this May, it recast those results -- and it ended up with a staggering net loss of $4.9 billion in 2025. That cash-burning AI segment will remain a dead weight on its bottom line as it expands its infrastructure.

With a $2 trillion market debut, SpaceX would trade 107 times its 2025 sales. AST SpaceMobile looks even pricier at 288 times last year's sales -- but that's because it only launched its first commercial satellites in late 2024.

That's why AST's revenue surged 1,505% to $71 million in 2025. Its net loss widened from $300 million to $342 million, but it isn't burdened by money-losing rocket and AI divisions. Instead, it relies on SpaceX's Falcon rockets to carry its BlueBird (BB) satellites into orbit.

If SpaceX grows its top line at a 30% CAGR from 2025 to 2028, its revenue would reach $41.1 billion by the final year. At $2 trillion, it would trade at 49 times that estimate.

As for AST, analysts expect its revenue to grow at a 198% CAGR from 2025 to 2028, reaching $1.9 billion by the final year. At its current market cap of $28 billion, it trades at 15 times that estimate, making it seem more reasonably valued than SpaceX.

Analysts also expect AST to turn profitable in 2027 and 2028 as economies of scale kick in. SpaceX will likely struggle to break even as its AI and space losses erase Starlink's profits.

Based on these facts, I don't think investors should sell their AST shares to buy SpaceX. SpaceX will inevitably pull back after its red-hot market debut, so there's no reason to chase it when AST still looks reasonably valued relative to its long-term growth potential.

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Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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