So, Amazon is buying a satellite company. That's a big deal, right? Well, according to BNP Paribas analyst Nick Jones, it's a very smart deal—a "strategic positive," as he puts it. But in the grand scheme of Amazon's finances, it's also kind of a rounding error.
The Amazon.com Inc. (AMZN) plan to snap up Globalstar, Inc. (GSAT) for about $11.6 billion is all about accelerating its own Amazon Leo satellite network project. Jones notes the acquisition isn't just about adding hardware; it's about getting Globalstar's direct-to-device capabilities, its spectrum, and its existing infrastructure. It's a fast-track ticket to commercialization.
Perhaps the juiciest part of the deal is what it does for Amazon's relationship with Apple Inc. (AAPL). Globalstar already has a partnership with Apple to provide satellite connectivity for emergency services on iPhones and Apple Watches. By buying Globalstar, Amazon isn't just getting a satellite company; it's effectively locking in and validating that high-profile partnership. It positions Amazon more competitively in the satellite communications race, with a ready-made, demand-proven customer in Apple.
Now, for the part that makes this so very Amazon. Look at the numbers. Globalstar generated $273 million in revenue last year, with a net loss of $9 million. Amazon, by comparison, pulled in $716.9 billion in revenue and netted $77.7 billion in income. The financial impact of this deal on Amazon's income statement? Jones calls it "negligible." It's a capital-intensive business with a long deployment timeline, so the near-term financial splash is minimal. For a company of Amazon's scale, $11.6 billion is strategic pocket change.
And paying for it isn't a problem. Jones highlights that Amazon is sitting on a mountain of $123 billion in cash and equivalents. On top of that, it raised more than $50 billion just in the first quarter of this year. That leaves it plenty of room to fund this deal alongside its already-planned $200 billion in capital expenditures for 2026. The analyst also sees potential for Amazon to drive cost synergies between Globalstar and its own Amazon Leo project, which could help improve profitability sooner rather than later. The market, he adds, already seems to think this deal is as good as done.
Price Action: In premarket trading Wednesday, Amazon shares were down a slight 0.19% at $248.54, while Globalstar shares were up 0.10% at $79.98, according to market data.
