What Happened?
Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) jumped 8.4% in the morning session after the company was awarded a $500 million contract by the U.S. Department of Defense for counter-drone systems.
The firm-fixed-price contract is for the supply of commercial counter-unmanned aerial systems (C-UAS), which are technologies designed to detect and disable enemy drones.
The agreement with the U.S. Army is scheduled to run through June 29, 2029. This significant contract award added to investor optimism that followed the company's strong fiscal fourth-quarter earnings report from earlier in the week.
Is now the time to buy AeroVironment? Access our full analysis report here, it’s free.
What Is The Market Telling Us
AeroVironment’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 23% on the news that it reported first-quarter 2026 results that crushed analyst estimates.
The takeaway from the print was that demand is outrunning supply across drones, counter-drone systems and laser weapons as the order book (bookings $2.7B, book-to-bill 1.4) grew faster than revenue, and funded backlog jumped ~65% to $1.2 billion from $726.6 million a year ago.
Adding to the positive updates, revenue of $641.6 million (up 133% year-over-year) topped the ~$558 million consensus by roughly 15%, and adjusted EPS of $1.84 beat the ~$1.47 estimate by about 24%. Crucially, this wasn't all acquisition math. BlueHalo and Empirical Systems contributed $282.3 million (44%) of Q4 revenue, but organic growth was still 31%. CEO Wahid Nawabi said the year left AV "a stronger, more resilient, and diversified company," pointing to counter-UAS Titan orders that more than doubled and a LOCUST laser that shot down drones with a 100% success rate at sea aboard the USS George H.W. Bush. However, the outlook was mixed, as the company's full-year revenue and profit guidance for the upcoming year fell slightly short of Wall Street's consensus.
Notably, FY2027 adjusted-EPS guidance of $3.02–$3.34 was well below the ~$3.85–$4.00 consensus, yet the stock soared. Investors looked through it because the shortfall was self-inflicted. Depreciation and cloud amortization were expected to rise ~$37 million (77%) as AV pours capital into new Switchblade, missile and laser capacity ahead of orders, not because demand is fading.
AeroVironment is down 24.8% since the beginning of the year, and at $192.54 per share, it is trading 53% below its 52-week high of $409.83 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $1,971.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
