AeroVironment shares skyrocketed 21% after the dronemaker easily blew past Wall Street’s fiscal fourth-quarter estimates, benefiting from U.S. plans to modernize the military and secure space.
The Virginia-based defense company more than doubled revenue from a year ago to $642 million, while funded backlog jumped 65% to $1.2 billion. Revenue for autonomous systems totaled $492 million, surpassing the $402 million StreetAccount expectations.
CEO Wahid Nawabi told analysts in a Monday earnings call that the company is scaling manufacturing to keep pace with unprecedented demand and that the company’s growth opportunity has “never been stronger.
Other drone stocks rallied in support. Kratos Defense and Security Solutions surged 7%, while Red Cat gained 5%. Small-cap drone components maker Unusual Machines added 9%.
While shares have pulled back in June, AeroVironment is positioning itself for a windfall from the step-up in government funding. The Department of Defense budget is requesting a record $75 billion for drones in 2027 as the Trump administration seeks a historic $1.5 trillion defense budget.
In his second term in office, President Donald Trump has made American drone dominance one of his primary military goals amid a backdrop of rising geopolitical threats, along with scaling U.S. shipbuilding and an extensive Golden Dome project to protect space.
One of AeroVironment’s products is a high-energy laser system known as LOCUST, capable of shooting down drone targets. Analysts view the tool as essential to the company’s 2027 guidance and the Army’s enduring high-energy laser program.
“Should geopolitical tensions intensify, AVAV is positioned among the top beneficiaries, in our view,” wrote analysts at KeyBanc Capital Markets. “We continue to see multiple levers of growth and believe AVAV is an opportunity for long-term growth investors.”
Nawabi told CNBC’s Morgan Brennan in a recent interview that the U.S. and its allies are “playing catch-up” in adopting drone tech, and conflicts in both Ukraine and Iran have heightened urgency.
“We knew that this inflection point was going to happen sooner or later,” he said, adding that recent conflicts have brought drone technology to the “forefront.”
AeroVironment said its BlueHalo and Empirical Systems Aerospace acquisitions added $282.3 million in revenue to the current quarter.
— CNBC’s Chris Eudaily contributed reporting
AeroVironment stock chart.
