Shares of Unusual Machines (UMAC +7.76%) rose sharply on Tuesday amid a rally in drone stocks.
Image source: Getty Images.
Positive news for drone suppliers
AeroVironment's blockbuster earnings report provided a boost to the drone industry. The unmanned systems producer reported a 133% gain in revenue and stronger-than-expected profits after the market close on Monday.
Traders reacted to the news by bidding up the share prices of drone-related companies.
NYSEMKT: UMAC
Key Data Points
Unusual Machines was already on many investors' radars. In May, The Wall Street Journal reported that the Trump administration was considering taking a stake in the drone component manufacturer to accelerate domestic drone production.
Index fund buying could also be contributing to the gains
Unusual Machines' stock price was likely also bolstered by its inclusion in the Russell 2000 Index on Monday. Exchange-traded funds (ETFs) tracking the popular small-cap index manage more than $100 billion worth of investor capital. Purchases by these funds can temporarily drive up the share price of a new index addition.
"We've been focused on building a business that can deliver, expanding production capacity, strengthening the supply chain, and staying ready to meet demand," Unusual Machines CEO Allan Evans said in a press release. "Inclusion in the Russell 2000 reflects that progress and increases our visibility with a broader group of institutional investors."
