We recently compiled a list of the 12 Best Multibagger Stocks to Buy Right Now.In this article, we are going to take a look at where AST SpaceMobile, Inc. (NASDAQ:ASTS) stands against the other multibagger stocks.
The US equities continued their upward movement in 2024 and fueled the S&P 500 to record highs. Much of this optimism in the broader market was backed by the strong US economy and the Federal Reserve’s stance to cut interest rates. As per PBS News, 2024 saw several familiar winners, like big technology stocks. These stocks got even bigger due to continuous increases in their stock prices. Apart from certain tech giants, strong momentum was also seen in Bitcoin, gold, and other investments.
Performance of US Equity Markets in 2024- A Recap
Ameriprise Financial reported that 2024 had a strong start, with the S&P 500 Index concluding the Q1 on a high note due to a healthy US economic backdrop, moderating inflation, improvement in profit conditions, and anticipations of rate cuts from the US Fed.
The strong growth momentum continued in Q2 as the S&P 500 Index saw its strongest three-quarter run since mid-2021. Ameriprise Financial highlighted that an AI boom again drove healthy gains throughout IT and communication services. However, increased rates and a pause by the US Fed capped broader market gains. In September, the US Fed reduced its policy rate for the first time since 2020, concluding its aggressive rate-hiking cycle to control inflation. Therefore, it began a new monetary policy stance that supported economic growth and the labor market. Additionally, since the election, investors’ confidence has been further boosted towards risky assets, including equities.
For the S&P 500, J.P. Morgan Research projects a price target of 6,500 next year, with EPS of $270. The US is expected to remain a global growth engine with the expansionary business cycle, healthy labor market, broadening of AI-associated capital spending, and the prospect of strong capital markets and dealmaking activity.
Furthermore, BlackRock sees several factors expected to support stocks in 2025. The decisive election result removed key uncertainty hanging over the broader US market. The rally that was seen after the results might continue into the start of 2025 primarily because of prospects of tax cuts and deregulation throughout key industries. While the impact of some policies remains uncertain, history has a long-term record of positive returns in 1st year of a Presidential term. The firm also believes that earnings and valuations hint at healthy potential for a continued broadening of the market. Its analysis of the S&P 500 data reflects that earnings for Mag 7 stocks outperformed the broader market by 37% in 2023. This earnings gap was narrowed across 2024. Now, it expects it to decline to 7.5% in 2025.
Our Methodology
To list the 12 Best Multibagger Stocks to Buy Right Now, we used a screener to shortlist the stocks that have gained over 100% over the past year and have healthy average upside potential. Finally, the stocks are arranged in ascending order of their average upside potential, as of 30th December 2024. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of a communications satellite in orbit, beaming its signal down to Earth.
AST SpaceMobile, Inc. (NASDAQ:ASTS) is engaged in developing and providing access to a space-based cellular broadband network for smartphones in the US.
AST SpaceMobile, Inc. (NASDAQ:ASTS)’s technology addresses a significant pain point, which is the lack of reliable mobile connectivity in remote and underserved areas. By offering direct-to-phone connectivity from satellites, it eliminates the need for ground-based infrastructure. The company successfully launched its first five commercial satellites, known as BlueBirds, reflecting a pivotal advancement toward establishing its space-based cellular network. Such satellites are among the largest communications arrays deployed in low-Earth orbit, underscoring AST SpaceMobile, Inc. (NASDAQ:ASTS)’s innovative capabilities.
With these satellites operational, the company can start garnering revenue via existing agreements with global telecom operators such as Vodafone, AT&T, and Rakuten. Revenue is expected to come from usage fees, data sharing, or subscription models. Furthermore, the BlueBird satellites have been designed to offer connectivity in remote and underserved regions, where traditional infrastructure is costly or impractical. These areas represent a vast, untapped market for AST SpaceMobile, Inc. (NASDAQ:ASTS)’s services.
As per Wall Street, the successful deployment of the BlueBird satellites is a game-changer for AST SpaceMobile, Inc. (NASDAQ:ASTS). These satellites should help the company unlock significant market opportunities, diversify its revenue streams, and establish itself as a leader in the ever-growing field of space-based mobile connectivity.
Overall ASTS ranks 4th on our list of the best multibagger stocks to buy right now. While we acknowledge the potential of ASTS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than ASTS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
