What Happened?
Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) jumped 3.2% in the afternoon session after the U.S. Army selected the company for its Next-Generation Counter-Unmanned Aircraft System Missile program, awarding it a $95.9 million contract. The contract was part of the Army's Long-Range Kinetic Interceptor (LRKI) program. Under the deal, AeroVironment will produce its Freedom Eagle FE-1 counter-drone missiles. This development represented a significant shift in U.S. defense manufacturing, as the company secured the contract over RTX, the world's second-largest defense contractor. The win signaled a break in the long-held dominance of a few traditional missile manufacturers in the industry.
After the initial pop the shares cooled down to $368.05, up 3.7% from previous close.
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What Is The Market Telling Us
AeroVironment’s shares are very volatile and have had 25 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 3 days ago when the stock gained 2.7% on the news that the company announced it was awarded a U.S. Army contract and named the lead software and systems integrator for the Human-Machine Integrated Formations (HMIF) program. The contract came from the U.S. Army's Rapid Capabilities and Critical Technologies Office (RCCTO). AeroVironment's Kinesis tactical mission planning and command-and-control software was selected to provide a unified interface for the project. This system is intended to simplify complex operations and improve mission capabilities. The company partnered with Applied Research Associates' Neya Systems, Parry Labs, and QinetiQ for the program. In other news, AeroVironment also revealed three new additions to its Switchblade family of loitering munitions, aiming to enhance operational flexibility on the battlefield.
AeroVironment is up 135% since the beginning of the year, but at $368.05 per share, it is still trading 10.2% below its 52-week high of $409.83 from October 2025. Investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $4,751.
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