AST SpaceMobile (ASTS 9.25%) posted big gains Monday in a session of strong trading for space stocks. The company's share price ended the daily session up 9.3%. Meanwhile, the S&P 500 (^GSPC 0.96%) and the Nasdaq Composite (^IXIC 0.94%) both gained 1% on the day.
AST SpaceMobile's valuation surged higher today amid excitement for the space industry, geopolitical developments, and comments from a Federal Reserve official that could point to a more favorable backdrop for the stock. The company's share price was able to close out the day with big gains despite an investment firm announcing they were no longer bullish on the stock.
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Scotiabank pumps the brakes on AST stock
AST stock actually opened Monday's trading in the red, and it had been down as much as 6.4% in the session. Scotiabank published new coverage on AST this morning, downgrading its rating on the stock from outperform to sector perform. While the investment firm is excited about the company's technologies and potential growth outlook, it has concerns about the valuation. After today's gains, the stock is now up 398% over the last year.
AST stock still surged thanks to other catalysts
Despite Scotiabank turning more cautious on AST, the space tech stock bounced higher as new catalysts emerged. After the U.S. bombed Iranian nuclear-development centers on Saturday, Iran responded with missile attacks on U.S. bases located in Iraq and Qatar today. Iran had actually warned the U.S. of the missile strikes in advance, and the small scale of the retaliation helped power bullish action for the broader market. The recent military actions between the U.S. and Iran also appears to have highlighted defense-industry opportunities and pushed valuations for multiple space-tech specialists higher today.
AST stock also got a boost from news on the interest rate front today. This morning, Federal Reserve vice chair for supervision Michelle Bowman said that would support interest rates potentially being lowered as early as next month. Given recent comments from Fed Chair Jerome Powell and other officials at the central bank, investors have broadly expected that September would be the earliest cuts might arrive -- but that's now shifting somewhat. If the Fed were to cut interest rates next month, it would likely be a strong bullish catalyst for AST and other space stocks with highly growth-dependent valuations.
