Shares of AST SpaceMobile (NASDAQ:ASTS) experienced a dramatic rally on Monday, closing at $86.77, up 21.44% from the previous session. The surge added approximately $5.95 billion to the company's market capitalization, which now stands at roughly $33.68 billion. In premarket trading on Tuesday, the stock continued its upward momentum, rising another 0.83% to $87.49, according to Google Finance.
Japan Subsidy Sparks Rally
The catalyst for the move was a report that Japan's Ministry of Internal Affairs and Communications is set to approve a 150 billion yen (approximately $926 million) subsidy package over three years for a low-Earth-orbit (LEO) satellite project led by Rakuten Group (TYO:4755) in partnership with AST SpaceMobile. The funding is intended to cover equipment and ground infrastructure costs for the consortium, which aims to develop a homegrown LEO satellite system. It is important to note that the subsidy has not yet been formally awarded, and the exact allocation to AST remains unclear.
Market Cap Swells Beyond Subsidy
The one-day gain in market capitalization—roughly $5.95 billion—is about 6.4 times the size of the reported Japanese subsidy pool. AST's market cap now stands at approximately 36 times that figure, though these calculations are based on the closing price and do not account for a fully diluted share count. The subsidy pool itself is estimated to be between 4.6 and 6.2 times AST's 2026 revenue guidance of $150 million to $200 million, a metric that underscores the potential impact of the funding on the company's financials.
Rakuten Also Gains
Rakuten Group also benefited from the news, with its shares climbing 6.2% in Tokyo trading on Tuesday, after earlier touching a gain of 7.9%. The broader market also performed well, with the Nasdaq Composite rising 2.07% on Monday, the S&P 500 gaining 1.18%, and the Dow Jones Industrial Average adding 0.59%. AST's rally significantly outpaced these indices, indicating that the move was driven by company-specific news rather than a broad risk-on sentiment.
Launch Milestones Ahead
AST SpaceMobile is focused on its next major milestone: the launch of BlueBirds 11, 12, and 13, scheduled for the first half of August from Cape Canaveral on a Falcon 9 rocket. This follows the successful deployment of BlueBirds 8, 9, and 10 on June 17, which are now operational in orbit. Each of these satellites carries communications arrays of approximately 2,400 square feet and is designed to deliver nearly twice the peak data speed of the earlier Block 1 BlueBirds, which recently achieved 98.9 Mbps to standard smartphones. CEO Abel Avellan has stated that the goal is to provide "space-based cellular broadband to everyone, everywhere," and the company is now "scaling launch cadence" in preparation for commercial service.
Regulatory and Analyst Outlook
The Federal Communications Commission (FCC) granted AST approval in April to operate up to 248 LEO satellites for U.S. supplemental coverage, using 700 MHz and 800 MHz bands in partnership with Verizon (NYSE:VZ), AT&T (NYSE:T), and FirstNet. This regulatory clearance is a key step toward commercial deployment. Wall Street analysts remain divided on the stock. According to Google Finance, over the past three months, nine analysts have rated AST: two as buy, five as hold, and two as sell. The average 12-month price target is $86.28, slightly below Monday's close of $86.77. The low target is $41.20 from Scotiabank's Andres Coello, while the high is $115.00 from Clear Street's Gregory Pendy.
What to Watch
Investors should monitor the formal approval of the Japanese subsidy and any details on the economic terms between Rakuten and AST. The August launch of BlueBirds 11-13 will be a critical test of the company's ability to scale its satellite constellation. Additionally, upcoming financial filings will need to show progress on revenue and backlog, particularly given the company's 2026 guidance of $150 million to $200 million in revenue, with roughly half expected from already contracted backlog.
