The latest exciting news from AST SpaceMobile (ASTS -1.05%) is that it has delivered five satellites to Cape Canaveral. This is the first step toward actually offering the space-based cellular broadband network it is building. If it can get this system up and running, AST SpaceMobile’s stock could become a millionaire. But don’t get too excited; this is just a small step toward a full-fledged service offering.

AST SpaceMobile has no service to sell

The problem with AST SpaceMobile right now is that it actually only has one working satellite in orbit. That satellite was launched in late 2022 and was designed to prove that the company’s goal of creating a space-based broadband cellular network that works with existing cell phones is possible. For now, that’s all AST SpaceMobile has to offer the world – a successful proof of concept.

Image source: Getty Images.

However, this proof of concept was enough to convince the telecommunications giants AT&T (NYSE: T) And Verizon (NYSE: VZ) on board as investors. This has two benefits. First, AST SpaceMobile has access to some major sources of cash as it tries to raise money. Second, AST SpaceMobile will already have customers when it finally starts launching more satellites so it can operate a commercial service. Establishing such partnerships has been a key goal of management, and these two agreements, along with other partnerships, are an important foundation for the future.

That future is looking increasingly interesting now. AST SpaceMobile has completed construction of five commercial satellites and has now delivered them to Cape Canaveral. While there are no guarantees, the hope is that they will launch in September. However, it is highly unlikely that the company will be operational immediately, as the satellites need to be deployed and tested before they can actually serve customers. But AST SpaceMobile is close to building a real business.

There is still a long way to go for AST SpaceMobile

The remarkable progress made in recent months is the reason for the stock’s rapid rise. In just three months, the stock is up more than 700%! That’s a huge gain in a very short period of time and contains a lot of good news. Of course, if AST SpaceMobile can get its space-based broadband cellular network up and running, there could be more big gains to come. It could actually help make more aggressive investors millionaires.

The key here, however, is that investing here is best suited for aggressive investors. The company is very clear, stating in the “Risks” section of its 10-K report: “We will continue to incur operating and net losses each quarter at least until such time as we begin generating revenues as a result of the planned launches of our commercial satellites, and we could continue to incur operating or net losses after we begin generating revenues.”

ASTS data from YCharts

The first goal, of course, is to get the five launch-ready satellites operational. But after that, 20 more will be produced and launched. The company estimates that this task could cost as much as $400 million, according to the latest estimate. But even that won’t be enough. The company’s longer-term goal is to put 95 satellites into orbit. If 20 satellites cost $400 million, that brings the cost of building 90 satellites to around $1.8 billion, without taking into account inflation, which could drive the price up even further over time, or cost efficiencies from producing higher volumes, which could lower unit costs.

With so much cost still to come, there’s a chance investors can get a bit of a head start on the stock today. Perhaps today’s price seems reasonable in the long run (at least in hindsight), but with so much work to be done, only the most aggressive investors should buy AST SpaceMobile shares today after the massive price run-up.

There are opportunities and risks here

AST SpaceMobile has made great business progress in a very short period of time, so there are reasons to be positive about the future and believe this stock could make millionaires. However, business success has translated into a massive share price run that could bring a lot of good news in too short a time. Young companies that invest a lot of money in building a business tend to be volatile, even if the overall stock trend is up over the long term. It wouldn’t be surprising to see a sharp decline after such a big run-up, which is why AST SpaceMobile is probably best suited for aggressive investors who are willing to hold out for the long term. Or, conversely, you could just wait for a pullback before pulling the trigger.