We recently compiled a list of the 10 Under-the-Radar Stocks with Massive Upside for 2025. In this article, we are going to take a look at where AST SpaceMobile, Inc. (NASDAQ:ASTS) stands against other under-the-radar stocks.
Investing in under-the-radar stocks can be a savvy move for those looking to diversify their portfolios and potentially reap significant rewards. These lesser-known companies often fly under the radar of mainstream investors, which can result in undervalued stock prices. Under-the-radar stocks can be found in various sectors, from emerging technologies to niche industries, and are often characterized by their small market capitalization, limited analyst coverage, and low trading volumes.
According to Business Insider, several lesser-known hedge funds have outperformed the market, Glen Kacher’s Light Street and David Rogers’ Castle Hook, for instance, returned 60% last year, outpacing many of their more prominent peers. Jason Mudrick’s firm also had a strong year, with returns of over 31%. Meanwhile, the largest hedge funds in the world, such as Citadel, D.E. Shaw, and Millennium, had good years, although most failed to match the S&P 500’s 23% gain.
The impressive returns achieved by lesser-known hedge funds can be attributed to their bold investment strategies, which included a focus on under-the-radar stocks. By investing in these hidden gems, these funds were able to capitalize on undervalued opportunities and reap significant rewards. As a result, these under-the-radar stocks proved to be a key factor in the funds’ success.
Read Also: 12 Cheapest Stocks with Biggest Upside Potential and Top 10 Undervalued Tech Stocks to Buy According to Hedge Funds.
In an interview with Bloomberg on January 18, David Kostin, Chief US Equity Strategist at Goldman Sachs, shared his outlook for US equities, forecasting an 11% upside for the S&P 500 index, based on the expectation that earnings per share will grow around 11% in calendar 2025 and 7% in calendar 2026. Kostin emphasized that equity investors are already looking ahead, with the fourth-quarter earnings season about to kick off, Kostin noted that earnings growth for the quarter is expected to be around 8%, but the strong dollar may lead to fewer positive surprises than in previous years.
Kostin highlighted that the US stock market is trading at a high multiple, around 22-23 times forward earnings, which is historically high. As a result, earnings will be the primary driver of the market, rather than multiple expansion. He expects the S&P 500 index to rise to around 6,500, driven by earnings growth. Kostin also cautioned that a higher bond yield environment is a concern, as it has been a headwind for equities in the past. However, Kostin expects that inflation will come down slowly, and bond yields will fall to around 4.25% over the rest of the year.
Kostin suggested that portfolio managers should focus on owning US companies with domestically driven revenues, rather than those with high export exposure. This is because companies with high domestic sales are less likely to be affected by retaliatory tariffs. Kostin also mentioned that the Magnificent Seven companies have significant sales outside the US, and may face potential risks due to their high export exposure.
Kostin acknowledged that the Magnificent Seven companies have had fantastic stock performances in 2023 and 2024. However, he expects their premium earnings growth to narrow substantially in 2025 and 2026, leading to a narrowing excess return. As a result, Kostin favors mid-cap stocks, which trade at lower multiples and have similar growth rates to large-cap stocks. He believes that mid-cap US equities, with a market capitalization of between $5 billion to $20 billion, offer a better risk-reward profile.
Lesser-known, under-the-radar companies are often overlooked by mainstream investors, but present a unique potential for growth, particularly in sectors poised for innovation and transformation.
An aerial view of a communications satellite in orbit, beaming its signal down to Earth.
Our Methodology
To compile our list of the 10 under-the-radar stocks with massive upside for 2025, we sifted through internet rankings to find 30 under-the-radar stocks. From that list, we narrowed our choices to the 10 stocks that analysts see the most upside to. The list is sorted in ascending order of analysts’ average upside potential, as of January 17. We also included their stock price as of January 17 and their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024.
Why do we care about what hedge funds do? 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).
AST SpaceMobile, Inc. (NASDAQ:ASTS)
Upside Potential: 69.29%
Stock Price as of January 18: $21.23
Number of Hedge Fund Investors: 18
AST SpaceMobile, Inc. (NASDAQ:ASTS) is pioneering satellite-based mobile broadband that aims to provide high-speed internet access directly to smartphones from anywhere on the planet. The company’s innovative technology aims to bridge the connectivity gap in underserved areas. AST SpaceMobile, Inc. (NASDAQ:ASTS) generates revenue through partnerships with mobile network operators.
AST SpaceMobile, Inc. (NASDAQ:ASTS) has made significant strides in deploying its BlueBird satellites, the largest commercial phase-array ever launched into low Earth orbit. The company successfully launched and deployed its first five Block 1 BlueBird satellites, which are now ready to become operational. These satellites are designed to provide cellular broadband coverage on a non-continuous basis, initially targeting close to 100% nationwide coverage in the United States. The company has also secured additional launch capacity for up to 60 Block 2 BlueBird satellites, which are expected to support up to 10,000 MHz of processing bandwidth, a tenfold improvement over the current Block 1 satellites. This expanded network will enable AST SpaceMobile, Inc. (NASDAQ:ASTS) to deliver continuous service coverage in key markets, including the United States, Europe, Japan, and strategic markets.
To ensure the seamless integration of its technology into existing cellular networks, AST SpaceMobile, Inc. (NASDAQ:ASTS) has formed strategic partnerships with major mobile network operators (MNOs). The company has filed for Special Temporary Authority (STA) with the Federal Communications Commission (FCC) to begin beta testing in the United States with partners such as AT&T and Verizon. This testing phase is crucial for validating the performance and reliability of the BlueBird satellites and for ensuring that they can effectively integrate with the core networks of MNOs. Additionally, AST SpaceMobile, Inc. (NASDAQ:ASTS) is in ongoing discussions with over 45 MNOs globally, representing approximately 2.8 billion existing subscribers, to select initial coverage markets and expand its commercial reach.
Overall ASTS ranks 3rd on our list of the under-the-radar stocks. While we acknowledge the potential of ASTS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an 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.
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Disclosure: None. This article is originally published at Insider Monkey.