MW How the Globalstar purchase could turn Amazon's Leo into a satellite powerhouse

By William Gavin

The Globalstar deal may seem trivial relative to Amazon's size, but it represents an 'important signal' that Amazon is committed to space

Amazon's satellite division may be in the early stages of development, but analysts see room for it to grow and rival SpaceX and other companies.

Amazon is raking in cash at the box office after sending Ryan Gosling to space with "Project Hail Mary." Its latest space play could make a real-world satellite business into a winner, too.

The e-commerce giant said Tuesday that it will acquire Globalstar, a satellite company focused on providing service to areas where coverage is minimal, in a deal set to close next year. It would be one of Amazon's (AMZN) biggest acquisitions and could help turn its Amazon Leo division into a satellite-internet powerhouse.

Morgan Stanley analyst Brian Nowak on Wednesday estimated that the Leo business is worth negative $75 billion in its current state. However, he said that "Leo is all upside" for Amazon shares.

"We believe this acquisition provides important signal for investors that [Amazon] is committed to Leo/Space," Nowak wrote in a note to clients. He rates Amazon a buy with a price target of $300 per share, implying upside of about 21% from current levels.

Amazon has spent more than $10 billion on Leo, and the Globalstar deal could be valued at $11.6 billion. That's roughly $2 billion shy of what Amazon paid to acquire Whole Foods in 2017 and more than what it paid to beef up its streaming service with MGM in 2021.

The Globalstar deal represents just a fraction of Amazon's planned $200 billion in capital expenditures this year. And the value of Globalstar, which according to FactSet data has reported a net loss every year since 2019, is less than 1% of Amazon's market capitalization of more than $2.6 trillion.

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However, the deal would give Amazon access to Globalstar's dozens of satellites and relationships with partners and customers, such as MDA Space $(MDA)$. Amazon also agreed to continue supporting some satellite services for Apple $(AAPL)$ devices currently provided by Globalstar. That opens the door for Leo to eventually offer a slew of satellite-powered services, such as photo messages and maps, Nowak wrote.

The deal would also give Amazon access to L and S band spectrum licenses, which would let Amazon develop its own direct-to-device network without leaning on mobile network operators. Globalstar also has terrestrial spectrum that could boost connectivity for warehouse automation or drones, Nowak said.

"You can spend huge amounts of money on satellites, but you cannot shortcut spectrum and licensing in the same way," Shay Boloor, chief market strategist at Futurum Equities, told MarketWatch via email. Boloor also called the acquisition an "incredible move" that turns Leo into a "broader connectivity moat."

Amazon's stock eased 0.3% in recent midday trading after running up 3.8% on the deal news to close Tuesday just 2% shy of its Nov. 3 record close of $254.

See: Amazon's stock is on its best run since 2022 as Globalstar acquisition fuels rally

Amazon has said it has "meaningful" revenue commitments from commercial and government customers such as Delta Air Lines $(DAL)$. It plans for an official launch in mid-2026 and aims to launch direct-to-device services in 2028, thanks to the Globalstar purchase.

Those plans rely on Amazon launching more satellites into orbit over the next several years. By 2035, the company plans to operate more than 7,000 satellites, broadening its coverage. It currently operates about 240 satellites.

Chief rival SpaceX, which owns satellite-internet company Starlink, has more than 10,000 satellites in orbit. It has also agreed to buy roughly $20 billion worth of spectrum from EchoStar $(SATS)$ and offers direct-to-device service through partners like T-Mobile $(TMUS)$.

See: Space investing is heating up as SpaceX rockets toward a record-breaking IPO

Another rival could also get in on the hunt for spectrum. Shares of both Iridium Communications $(IRDM)$ and ViaSat $(VSAT)$ rose Wednesday, with an Oppenheimer analyst speculating that AST SpaceMobile (ASTS) could try to acquire those companies' spectra to match Amazon. Deutsche Bank, meanwhile, sees AST SpaceMobile as an acquisition target.

"We believe there is strategic optionality in [AST SpaceMobile's stock] since a larger company looking to accelerate its own D2D plans could acquire ASTS and benefit from ASTS's aforementioned competitive advantages," wrote analyst Bryan Kraft, who cut his price target on the stock to $117 from $139 per share but reiterated a buy rating.

AST SpaceMobile already has partnership with mobile network operators and plans to deliver a commercial service in 2027, assuming that it can meet its launch requirements. AST SpaceMobile shares fell 11% on Tuesday and extended their losses in early trading on Wednesday.

Kraft expects the company to offer cheaper service than previously anticipated to better compete with Amazon and other rivals. However, he noted that that there are about 6 billion mobile lines currently in service and 2.5 billion people without broadband service, leaving plenty of room for multiple competitors.

-William Gavin

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April 15, 2026 12:34 ET (16:34 GMT)

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