Direct-to-cell satellite communications provider AST SpaceMobile (ASTS 1.14%) ran up 16% through 10:05 a.m. ET Thursday after announcing, last night after close of trading, that the U.S. Space Development Agency (SDA, an arm of the Space Force) has chosen AST to participate in its new Hybrid Acquisition for Proliferated Low Earth Orbit (HALO) program.

What this means for AST SpaceMobile

The initial award value is reported to be small -- just $20,000, according to SpaceNews. To win more money, AST must "compete for upcoming prototype demonstration projects" under HALO -- and is not guaranteed to win any contracts at all. (Indeed, with 18 other companies joining HALO, there will be plenty of competition.) Still, the news is good for AST as it makes the company officially a Space Force "prime contractor" that can be awarded "specific prototype orders."

The subject matter of the contracts that AST might compete for was not stated outright, but AST Chief Commercial Officer Chris Ivory dropped at least a hint, noting that AST's "space-based cellular broadband technology has the potential to enhance SDA's stated mission at the transport, tracking, and ground layers in a secure and reliable way."

This suggests that AST will aim to play a part in SDA's multibillion-dollar Proliferated Warfighter Space Architecture, or PWSA program.

Is AST SpaceMobile stock a buy?

This, too, is good news for AST, because it gives the company potentially a new revenue stream and a new customer for its space-based cellphone services, which mainly permit off-the-shelf cellphones to call each other from Earth, without need for intervening cellphone towers.

For a still basically revenue-less -- but with potential -- company like AST, that could be a game changer, and an additional source of funds as it builds out its constellation of satellites that could eventually cost in the $3 billion range.

The lack of revenue (or profits) for the time being means AST remains a speculative investment. But a strong vote of support from the Space Force could make this space stock less risky than it otherwise might have been.