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On Monday, Citi reiterated a Neutral rating on MDA Space Ltd (MDA:CN) (OTC: MDALF) shares, maintaining a price target of Cdn$30.00. The confirmation follows MDA’s announcement of securing an approximately $1.1 billion contract with Globalstar (NYSE:GSAT) to act as the prime contractor for its next-generation Low Earth Orbit (LEO) satellite constellation. Under this agreement, MDA will produce over 50 AURORA software-defined digital satellites.
The substantial contract marks an increase from the initial $750 million to $1.1 billion and serves as a continuation of the ATP contract publicized in November. The analyst from Citi views this expansion positively, especially in light of the recent concerns about the company’s stock performance, which was affected by rumors that Apple (NASDAQ:AAPL) might collaborate with Starlink, potentially jeopardizing the future of Globalstar’s constellation.
The announcement has helped to alleviate some of the market’s worries, as it appears that Apple may be looking to work with both Starlink and Globalstar. This strategy would potentially enable Apple to maximize the Total (EPA:TTEF) Addressable Market (TAM) for its phone and watch hardware products.
MDA’s latest contract with Globalstar is a significant development for the company, providing a boost after the recent selloff of its stocks. The new deal underlines the company’s role in the growing space sector and its ability to secure major contracts amidst a competitive landscape.
The Citi analyst’s comments suggest a belief that the dual partnership approach by Apple could benefit MDA by ensuring a broader customer base for its satellite technology. This contract not only solidifies MDA’s position in the industry but also reassures investors about the company’s future prospects.
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