Why BlackSky Technology Stock Is Soaring Today

Key Points

• BlackSky stock is surging in today's trading amid a bullish outlook on defense-tech spending.

• President Trump has approved advanced weapons systems being sent to Ukraine, which could be good news for BlackSky.

• BlackSky's valuation will likely see moves in conjunction with interest rate news this month.

• 10 stocks we like better than BlackSky Technology ›

BlackSky Technology (NYSE: BKSY) stock is scoring another day of big gains in Monday's trading. The satellite-technologies company's share price was up 7.4% as of 2:15 p.m. ET. The stock had been up as much as 11.6% earlier in the day.

BlackSky Technology's valuation is getting a boost today amid some favorable demand indicators for its defense-related technologies. The stock is also getting a lift from expectations that interest rates could be moving lower in the near future.

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BlackSky Technology stock surges on defense-spending outlook

Citi published new coverage on companies in the space tech, defense, and aeronautics industries today and said that it was seeing strong demand across the broader category. While BlackSky wasn't specifically given new rating or price target coverage, its stock appears to be benefiting from Citi's bullish outlook on the cross section of related technologies and industries.

BlackSky stock is likely also getting a boost from news that President Donald Trump has approved new, advanced weapons systems being sent to Ukraine in order to aid the country in its conflict with Russia. On July 8, BlackSky announced that it had signed a new contract with an international customer focused on supporting Ukraine in the war.

What's next for BlackSky stock?

With today's gains, BlackSky now has a market capitalization of roughly $773 million -- and it's trading at roughly 5.9 times expected forward sales for the year. The stock is now up 124% over the last month.

In addition to growing demand in the defense technologies space, BlackSky stock has recently been benefiting from expectations that the Federal Reserve is now likely to issue multiple cuts to the benchmark interest rate this year. Previously, investors had been split on whether even a single rate cut was in the cards. If the central banking authority does move to rapidly cut rates, that could create another strong bullish catalyst for BlackSky and other growth stocks.

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Citigroup is an advertising partner of Motley Fool Money. Keith Noonan has 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.