Space mobility specialist AST SpaceMobile (ASTS 2.47%) is formalizing ties with partner AT&T ahead of its commercial launch this summer. That news, along with AST's latest earnings report, has the stock going to the moon.

Shares of AST SpaceMobile were up 34% as of 10:30 a.m. ET after opening as much as 48% higher.

An important strategic partner

AT&T and AST SpaceMobile have been working together since 2018, but this new commercial agreement is a big step toward solidifying the partnership and advancing AST's push toward revenue generation. AST plans to launch its initial five satellites into space this summer, which would enable commercial service.

As part of the new agreement, AT&T's head of network, Chris Sambar, will be appointed to AST's board. The companies said they will work together to roll out the technology, including developing, testing, and troubleshooting in the pursuit of making continental U.S. satellite coverage possible.

"Working together with AT&T has paved the way to unlock the potential of space-based cellular broadband directly to everyday smartphones," AST founder and CEO Abel Avellan said in a statement. "We aim to bring seamless, reliable service to consumers and businesses across the continental U.S., transforming the way people connect and access information."

AST also reported its losses are shrinking. The company lost $0.16 per share in the first quarter, down from $0.23 per share a year ago, on revenue of about $500,000.

Is AST SpaceMobile stock a buy?

There is a lot to be excited about here. In AT&T, AST has a strong partner to help commercialize its technology. What seemed like a far-fetched plan just a few years ago is now closing in on becoming a reality.

Still, some caution is warranted. Space stocks are risky by nature. The launch this summer is only the beginning of a very long rollout, and as the companies mentioned in the announcement, there is likely to be a need for significant troubleshooting and modifications as the technology moves beyond a more controlled testing environment and into real-world conditions.

The total market size is still to be determined as well. AST's technology could be a great alternative in areas where terrestrial cellular can't reach, but the laws of physics make terrestrial a better choice in most areas.

AST has historically been a volatile stock. Investors who are intrigued by the opportunity and willing to accept the risk might want to be patient here following this jump to see if there is a better entry point in the weeks to come.