Amazon (NASDAQ:AMZN) is making a push deeper into the satellite space, and investors are paying attention. The tech giant’s ~$11.60 billion move to acquire Globalstar and strengthen its LEO ambitions sent AMZN shares about 4% higher following the announcement.
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Forget margin or options. Here's how the pros trade AMZNThat reaction makes sense to Morgan Stanley analyst Brian Nowak, who lists five reasons why GSAT will “expand Leo’s go to market and TAM.”
First, a GSAT acquisition would allow Amazon to move beyond its current focus on satellite broadband into direct-to-device (D2D) connectivity more quickly. D2D enables devices to connect directly to low Earth orbit satellites without relying on traditional cell towers, and GSAT would give Amazon a “clearer path” into mobile satellite services.
Second, GSAT’s mobile satellite spectrum is both scarce and strategically important. It holds L and S band licenses, which are in “high demand” because they enable more reliable connections in difficult conditions without requiring perfect line-of-sight or large antennas. Owning these licenses would reduce Amazon’s reliance on mobile network operator partnerships and support a global D2D network, alongside its planned system rollout around 2028.
Third, GSAT would expand Amazon’s in-orbit satellite presence. GSAT operates ~24 satellites today and has agreements for roughly 50 additional satellites, which would add to Leo’s existing ~200-satellite constellation. “This gives AMZN an initial toe-hold in the D2D market as they work to build-out an expanded D2D offering in 2028,” Nowak explained.
Fourth, GSAT’s terrestrial Band 53 spectrum introduces longer-term optionality. The company has been using this spectrum in its XCOM RAN private 5G solution, which has not yet been commercially scaled, but could potentially support Amazon’s broader operations in the future, including warehouse automation, drones, and robotics connectivity.
Lastly, GSAT’s existing partnership with Apple would give Amazon immediate exposure to “real-world D2C usage at scale.” This includes satellite-enabled features such as Emergency SOS, Messages, Roadside Assistance, and Find My on iPhone 14 and newer devices, as well as Apple Watch Ultra models. Over time, Nowak thinks this relationship could support broader satellite services like mapping, messaging, third-party app integration, and potentially even satellite-based connectivity services, although this would take “meaningful multi-year investment for Amazon Leo to scale.”
“We believe this acquisition provides important signal for investors that AMZN is committed to Leo/Space,” Nowak summed up. “From here, it will be important to monitor execution around AMZN’s direct-to-device satellite development/manufacturing (existing Leo satellites are for broadband) as well as its increasing launch cadence, deployment execution for broadband satellites as well as D2D satellites to come.”
As for the stock, Nowak isn’t holding back. The analyst rates AMZN an Overweight (i.e., Buy) and sets a $300 price target, pointing to ~20% upside from current levels. (To watch Nowak’s track record, click here)
Overall, AMZN gets strong backing elsewhere on the Street. Based on a mix of 42 Buys vs. 3 Holds, the analyst consensus rates the stock a Strong Buy. The forecast calls for a 12-month share appreciation of ~14%, considering the average price target stands at $284.77. (See AMZN stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.