AST SpaceMobile (ASTS) experienced a notable surge of approximately 16% on Wednesday following the announcement of the successful assembly and testing of its BlueBird 6 satellite. This impressive rally was amplified by Barclays upgrading its price target for ASTS to $60, emphasizing the company’s potential to deliver enhanced connectivity compared to its competitors. For investors, this could be an opportune moment to evaluate ASTS stock, particularly through exchange-traded funds (ETFs) that provide diversified exposure while mitigating the risks associated with holding individual stocks directly.
For those looking to gain exposure to ASTS, two ETFs worth considering are the Procure Space ETF (UFO) and the SPDR S&P Telecom ETF (XTL).
The Procure Space ETF, or UFO ETF, follows the S-Network Space Index, which consists of companies that generate at least 50% of their revenue from space-related activities, including satellite communications, rocket manufacturing, and geospatial technology. Some prominent holdings within the UFO ETF include Planet Labs (PL), Garmin (GRMN), and Rocket Lab (RKLB). Currently, the ETF boasts $117.27 million in assets under management (AUM) and has an expense ratio of 0.94%. It has delivered a remarkable return of 59.9% over the past six months. According to TipRanks, the UFO ETF holds a Moderate Buy consensus rating, with 31 Buy, 14 Hold, and two Sell recommendations within the last three months. The price target of $40.97 indicates a potential upside of nearly 13%.
Meanwhile, the SPDR S&P Telecom ETF, known as XTL, provides investment opportunities in the U.S. telecommunications sector by tracking the S&P Telecom Select Industry Index. It employs an equal-weighted approach, ensuring balanced exposure among small, mid, and large-cap telecom and communication equipment companies. In addition to ASTS, the XTL ETF includes major stocks such as Ciena (CIEN), Cogent (CCOI), and Verizon (VZ). The ETF has $159.59 million in AUM and features a lower expense ratio of 0.35%. Over the last six months, the XTL ETF has yielded a solid return of 37.5%. Wall Street analysts currently rate it as a Moderate Buy, with 34 Buy ratings and eight Hold ratings among its 42 holdings. The average price target of $152.95 suggests a potential upside of about 7.6%.
Investing in ETFs offers a strategic way to gain indirect exposure to AST SpaceMobile, lessening the risks associated with direct investments in this individual stock. Moreover, ETFs present a liquid and transparent avenue for market participation. Both UFO and XTL ETFs represent attractive options for investors interested in capitalizing on the growth trajectory of AST SpaceMobile and the broader telecommunications sector.