AeroVironment soars 40% in three days as counter-drone contract follows big quarterly beat

[Regular Australian Army AeroVironment Wasp III UAV launch, flying and recovery demonstration]
James Rolevink/iStock Editorial via Getty Images

AeroVironment (AVAV [https://seekingalpha.com/symbol/AVAV]) rallied 10.7% on Thursday after unveiling a $500M contract [https://seekingalpha.com/news/4609484-aerovironment-wins-500m-us-army-contract-to-supply-counter-drone-systems] with the U.S. Army to supply counter-drone systems, strengthening sentiment just days after reporting record FQ4 results [https://seekingalpha.com/news/4608245-aerovironment-surges-after-revenue-earnings-beat-on-defense-demand] that easily topped expectations.

Shares have gained 40% in the three days since the earnings announcement but are still down 21% YTD.

AeroVironment (AVAV [https://seekingalpha.com/symbol/AVAV]) will provide commercial Counter-UAS systems and solutions designed to detect and neutralize small drones used on the modern battlefield, an area management believes could become a key growth driver for the company during the next several years.

The award strengthens FY 2027 revenue visibility, helps mitigate the growth headwind from the SCAR termination, and validates management's view that Counter-UAS is becoming a major growth vector, Jefferies analyst Sheila Kahyaoglu said in a note.

"While the award does not replace SCAR, it helps offset investor concerns around the FY27 growth impact of the SCAR termination by adding a large funded opportunity within one of AVAV's highest-priority growth markets," the analyst wrote.

The contract reinforces the view that "Army procurement continues shifting toward commercially developed capabilities," which is an area where AeroVironment (AVAV [https://seekingalpha.com/symbol/AVAV]) has built a "durable competitive advantage," according to Clear Street's Brian Dobson.

Some defense tech and drone-related companies gained on Thursday, including Aevex (AVEX [https://seekingalpha.com/symbol/AVEX]) up 5.4%, Kratos Defense (KTOS [https://seekingalpha.com/symbol/KTOS]) up 4.3%, Swarmer (SWMR [https://seekingalpha.com/symbol/SWMR]) up 4.1%, HawkEye 360 (HAWK [https://seekingalpha.com/symbol/HAWK]) up 3.8%.

ETFs: (UAV), (DRNZ [https://seekingalpha.com/symbol/DRNZ]), (JEDI [https://seekingalpha.com/symbol/JEDI])

MORE ON AEROVIRONMENT

* AeroVironment: The Best Drone Stock Got Cheaper [https://seekingalpha.com/article/4919501-aerovironment-best-drone-stock-got-cheaper]
* AeroVironment: Knock Out Quarter And I'm Still Bullish [https://seekingalpha.com/article/4918873-aerovironment-knock-out-quarter-and-im-still-bullish]
* AeroVironment Q4 2026 Earnings Call Presentation [https://seekingalpha.com/article/4918734-aerovironment-inc-2026-q4-results-earnings-call-presentation]