Why EchoStar Bounced Back Today
EchoStar issued a press release touting its new 5G-enabled tablet.
The FCC recently threatened EchoStar's spectrum holdings, alleging it hadn't been building its 5G network fast enough.
Elon Musk's public spat with Donald Trump may also, believe it or not, account for the rise, since Musk's SpaceX wants EchoStar's spectrum.
10 stocks we like better than EchoStar ›
EchoStar (NASDAQ: SATS) shares were bouncing back today, up 10% as of 2 p.m. ET.
EchoStar's shares have been under severe pressure since the beginning of the year, but especially in the past week. That's because management decided to not make two separate interest payments on its debt, as it awaits a decision from the FCC regarding its spectrum. Management has a 30-day grace period to do so before the company is technically in default.
The spectrum debate has to do with the pace of EchoStar's 5G rollout, and is also indirectly linked up with Elon Musk's SpaceX.
Back in May, the new Trump-appointed FCC director sent a letter to EchoStar, stating that the extension it was granted to complete its 5G network buildout by the prior administration was under review. EchoStar had purchased valuable spectrum years ago, on the terms that it would build a 5G network to increase competition in the industry. However, EchoStar's buildout has been slow, which is perhaps not surprising, given its declining legacy business in satellite TV.
In an interesting wrinkle, Musk's SpaceX had led a campaign to win more satellite spectrum for its own services, including the spectrum held by EchoStar. That may have played a part in the FCC's initiation of a review, given Musk's ties to the Trump administration.
However, late yesterday, EchoStar issued a press release introducing its new Boost Mobile Celero tablet, the Celero5G TAB, a low-cost tablet that takes advantage of EchoStar's 5G network. While normally not that significant, the announcement of a new 5G product could go a ways toward making EchoStar's case to the FCC that it deserves to keep its spectrum.
Furthermore, it appears Musk's relationship with the Trump administration is now on the outs, given Musk's storm of posts today criticizing the administration and Republicans in Congress for the deficit expansion in the "Big, Beautiful Bill" making its way through Congress.
If Musk and Trump have a falling out, then the FCC may not aggressively pursue EchoStar's spectrum on behalf of SpaceX, if SpaceX's campaign was in fact a motivating factor in initiating the review.
EchoStar's stock has been punished severely, so it could make for a turnaround play if in fact it's able to deploy 5G to more areas and grow its low-cost Boost Mobile offerings. However, its high debt, declining legacy satellite TV business, and unresolved battle with the FCC remain big risks.
Betting on a big recovery is a highly risky proposition, and only appropriate for speculators at this point.
Before you buy stock in EchoStar, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and EchoStar wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!*
Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of June 2, 2025
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why EchoStar Bounced Back Today was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
40 minutes ago
- Yahoo
Peloton looks to place equipment in gyms, launch marketplace, TechCrunch says
Peloton (PTON) CEO Peter Stern said the company is exploring ways to expand its customer base by making its products available for use in gyms and launching a peer-to-peer marketplace for equipment, Ivan Mehta of TechCrunch reports, citing comments made by Stern at the Bloomberg Tech Summit. Peloton plans to distribute its machines to commercial gyms via is subsidiary Precor and will add Peloton workouts to compatible Precor equipment. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See Insiders' Hot Stocks on TipRanks >> Read More on PTON: Disclaimer & DisclosureReport an Issue Peloton's Strategic Initiatives and Margin Improvements Justify Buy Rating Peloton Interactive call volume above normal and directionally bullish Peloton's 'Repowered' Marketplace: A Strategic Move to Boost Revenue and Brand Loyalty Repowered: Peloton Stock (NASDAQ:PTON) Ticks Up with New Used Market Peloton price target lowered to $8.50 from $10 at Citi Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Broadcom Sinks as CEO Becomes Defensive on AI Opportunity -- Should Investors Buy the Dip?
Broadcom shares fell despite another strong quarter of AI revenue growth. However, its CEO got defensive when asked about the AI market opportunity he touted only six months ago. Still, the company is only at the beginning of its custom AI chip opportunity. 10 stocks we like better than Broadcom › Broadcom (NASDAQ: AVGO) once again reported robust artificial intelligence (AI) revenue growth in its fiscal second-quarter results released this week, with promises that the strong revenue growth would continue. The stock slipped despite an upbeat outlook, although it remains up more than 75% over the past year. Let's take a closer look at Broadcom's most recent results and the AI opportunity in front of it to see whether investors should buy this small dip. Broadcom CEO Hock Tan initially got investors excited back in December 2024 when he talked about the company having a $60 billion to $90 billion serviceable addressable market (SAM) opportunity in fiscal year 2027 with its three largest hyperscale (meaning they operate huge data centers) customers. However, when asked whether its SAM had increased, Tan told analysts he's "not playing the SAM game" and to "stop talking about SAM now." It was an unusual and defensive response from an executive who, only six months ago, was hyping Broadcom's SAM opportunity. However, Tan had said earlier that he anticipates Broadcom's current AI semiconductor revenue growth to sustain into fiscal 2026 after projecting it would grow by 60% to $5.1 billion in fiscal Q3. As one analyst on the call pointed out, that would imply $30 billion or more in AI semiconductor revenue in fiscal 2026. Much of Broadcom's AI semiconductor revenue growth is currently coming from its networking portfolio, particularly Ethernet switches. The company said its AI networking revenue surged by 170% year over year and represented 40% of its AI revenue. Perhaps, the bigger opportunity, though, is in custom AI chips. The company stated that custom AI chip revenue rose by double digits in the quarter and that it expects demand in the back half of 2026 to accelerate as inference demand surges. This is most likely coming from Alphabet, which was Broadcom's first customer for custom AI chips. However, the company said it still expects its three largest custom chip customers to each deploy 1 million AI chip clusters in 2027, mostly for training foundational AI models. Turning to Broadcom's results, its overall revenue climbed 20% year over year to $15 billion in the quarter, while adjusted earnings per share (EPS) soared 44% to $1.58 (adjusting for its prior 10-for-1 stock split). The results edged past analyst expectations for adjusted EPS of $1.56 on revenue of $14.99 billion, as compiled by LSEG. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, surged 67% year over year to $10 billion. AI-related revenue jumped 46% year over year to $4.4 billion. Total semiconductor solutions revenue rose 17% year over year to $8.4 billion, as the recovery in its non-AI chip revenue continues to be slow. Infrastructure software revenue, meanwhile, increased by 25% to $6.6 billion. The company credited the growth to strong sales of its VMware Cloud Foundation (VCF) platform and the transition of customers to subscription models. Its VCF platform helps customers create hybrid and multicloud environments, giving them the flexibility to manage workloads across both public clouds and their own on-premise data centers. Approximately 87% of VMware's top 10,000 customers have now adopted its VCF platform. Broadcom continues to generate strong cash flow, with cash flow from operations coming in at nearly $6.6 billion and free cash flow of $6.4 billion. It ended the quarter with nearly $9.5 billion in cash and equivalents and $67.3 billion in debt after buying back $4.2 billion worth of shares in the quarter. Its debt is a result of its $69 billion acquisition of VMware in 2023. Looking ahead, Broadcom forecasts fiscal Q3 revenue to increase by 21% to $15.8 billion, with semiconductor revenue rising 25% to $9.1 billion and infrastructure software revenue increasing 16% to $6.7 billion. It expects adjusted EBITDA to be about 66% of revenue, or about $10.4 billion. Broadcom continues to see strong AI revenue growth, led by its networking portfolio. But the best opportunity may still be in front of the company, with its custom AI chips. Only Alphabet is truly ramped up, and it has a huge opportunity with other customers. Now, Tan's sudden reluctance to talk about Broadcom's AI semiconductor SAM is disappointing, and the extent to which China's ByteDance -- one of its suspected in-progress large AI chip customers -- and the new Chinese export controls might have on that is unknown. Still, he did not back down from the growth of the company's three large hyperscale customers or that they plan to each deploy 1 million AI chip clusters in 2027. He also still has Apple as well as other customers that aren't quite as far along, which should also power growth in later years. From a valuation perspective, Broadcom now trades at a forward price-to-earnings (P/E) ratio of about 31.5, based on fiscal 2026 analyst estimates, and a price/earnings-to-growth ratio (PEG) of less than 0.4. Stocks with PEG ratios below 1 are generally considered undervalued. Given the growth opportunities still in front of it, I think investors can use this price dip to start building positions. The biggest risk would be a slowdown in spending on AI infrastructure, but we still appear to be in the early innings. Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Broadcom wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Broadcom Sinks as CEO Becomes Defensive on AI Opportunity -- Should Investors Buy the Dip? was originally published by The Motley Fool
Yahoo
an hour ago
- Yahoo
This week in Trumponomics: The looming import shortage
Few people pay attention to import and export data, which are among the weedier metrics of the economy's health. But these wonky numbers are giving some startling insights into the challenges everyday shoppers may be facing in a month or two or three. Imports plummeted in April, falling by 20% from the prior month. That's the biggest decline in data going back to 1992. It's considerably worse than the drop in imports at the onset of the COVID-19 pandemic in 2020. Does anybody remember what shopping was like during COVID? Aside from the masks and sanitizer, there were widespread product shortages followed by soaring inflation. People didn't mind at first, since many were stuck at home without much to do. But inflation got quite irksome after a couple of years, and it sank Joe Biden's presidency, along with Democratic electoral odds in 2024. We're not yet facing COVID-style shortages. But we might be if President Trump's trade war drags on through the fall and summer. Imports plunged in April because that's when Trump started slapping new import taxes on practically every product entering the United States. So far, Trump has raised the average tariff tax on imports from 2.5% to about 18%. Read more: What Trump's tariffs mean for the economy and your wallet Prices haven't shot up yet because many of the American companies that import goods saw this coming and stocked up ahead of the Trump tariffs. Imports jumped by a record amount in January and were elevated for the first quarter as a whole. Swollen inventories have kept supplies ample and prices in check. If April represents the new trend line, however, a sharp drop in imports will inevitably lead to higher prices and some shortages. 'The impact of tariffs will continue to reverse progress on returning inflation to 2%,' Goldman Sachs explained in a recent analysis. 'Our forecast reflects a sharp acceleration in most core goods categories, where tariff-related increases in prices will be most acute in consumer electronics, autos, and apparel.' The firm expects overall inflation to rise from 2.3% now to 3.5% by importers are handling the Trump tariffs in a variety of ways. Some are taking normal delivery of goods and paying the higher taxes. We know that because tariff revenue collected by the government soared in April and May. The higher cost of imports will eventually make its way to consumers via higher prices. Many other importers have canceled or postponed orders, hoping that Trump will make trade deals and future tariffs will be lower than current ones. They're also watching two high-profile cases in which courts have said some of Trump's tariffs are illegal, while leaving them in place until appeals play out. Trump himself controls much of what happens next. He has set a July 9 deadline for dozens of countries to initiate trade concessions, or else a punishing round of 'reciprocal' tariffs will go into effect, on top of those Trump has already imposed. Some business owners hope for greater clarity by then, though the July 9 deadline is arbitrary and Trump could change it. Read more: The latest news and updates on Trump's tariffs Once current inventories are gone, the rest of 2025 could be rocky. 'Our perspective in terms of how this will affect manufacturers and workers is that we'll see a replay of the initial COVID shock,' Jason Judd, executive director of the Global Labor Institute at Cornell University, told Yahoo Finance. 'It may not be as severe, depending on the distribution of the pain. If Trump comes back with a 40% tariff on apparel, that would feel like a COVID-era shock.' Trump, for his part, acts like everything is hunky-dory under his watch. 'America is hot!' he said on social media on June 6. 'Border is secure, prices are down. Wages are up!' That came after the employment report for May showed the economy created a middling 139,000 new jobs. Many economists, however, think America is cooling. The pace of job growth has slowed this year, the economy technically shrank in the first quarter, and the stock market has been flat in 2025. Trump's tariffs already seem to be punishing the manufacturing sector, which lost 8,000 jobs in May and is in a three-month slump. If that's 'hot,' a cold Trump economy is likely to be miserable. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices.
