Alphabet Owns 8.9 Million Shares of This Hot Space Stock. Is It a Buy?

Core Viewpoint - Alphabet, the parent company of Google and YouTube, has a significant investment arm focusing on high-growth sectors including AI, healthcare, infrastructure, and space [1] Investment in AST SpaceMobile - Alphabet's largest public stock investment is in AST SpaceMobile, holding 8.9 million shares valued at $903 million [2] - AST SpaceMobile is an early-stage satellite company transitioning from R&D to commercial operations, aiming to create a global cellular-broadband network in low Earth orbit [3] Investment Details - Alphabet initially invested in AST SpaceMobile through convertible notes in early 2024, alongside AT&T and Vodafone, with a conversion price of $5.75 per share [4] - The company converted these notes into nearly 26 million shares when the stock price exceeded 130% of the conversion price for 30 days, with Alphabet retaining 8.9 million shares [5] Contracts and Partnerships - AST SpaceMobile has secured contracts with 50 mobile operators serving 3 billion subscribers and significant contracts with the U.S. government, including a $43 million contract with the Space Development Agency [7] Future Plans - The company plans to deploy a satellite constellation for continuous coverage in the U.S., Europe, and Japan, aiming for 45 to 60 satellites in orbit by the end of the year [8] - Currently, six BlueBird satellites have been deployed, with plans for a total of 90 to 100 satellites in low Earth orbit [9][10] Financial Position - AST SpaceMobile had nearly $2.8 billion in cash and equivalents at the end of last year and raised an additional $1 billion in February [11] - Analysts project revenue of $178 million for this year, increasing to $805 million in 2027 and $2 billion by 2028, with expectations of profitability by 2028 [12][13] Stock Valuation - AST SpaceMobile's stock trades at 155 times this year's projected sales and around 81 times projected 2028 earnings, indicating a high valuation [14]