aero environment Shares soared 15% as the drone maker handily beat Wall Street’s fourth-quarter earnings estimates and benefited from U.S. plans to modernize the military and secure space.
The Virginia-based defense company saw revenue more than double year-over-year to $642 million, and its funding balance increased 65% to $1.2 billion. Autonomous Systems revenue totaled $492 million, beating StreetAccount estimates of $402 million.
CEO Wahid Nawabi told analysts on an earnings call Monday that the company’s growth opportunities are “as strong as ever” as it ramps up manufacturing to meet unprecedented demand.
Other drone stocks also rallied in support. Kratos Defense and Security Solutions While it jumped 4%, red cat Increased by 1%. small drone parts manufacturer unusual machine Added 12%.
While its stock price fell in June, Aerovironment is poised to benefit from a windfall from increased government funding. The Pentagon budget calls for a record $75 billion for drones in 2027, as the Trump administration seeks a historic $1.5 trillion defense budget.
President Donald Trump, who is in his second term in office, has made domination of U.S. drones one of his major military goals, along with expanding the scale of U.S. shipbuilding and the large-scale Golden Dome project to protect space, against a backdrop of increasing geopolitical threats.
One of AeroVironment’s products is a high-energy laser system known as LOCUST that can shoot down drone targets. Analysts see the tool as essential to the company’s 2027 guidance and the Army’s permanent high-energy laser program.
Analysts at KeyBanc Capital Markets said: “If geopolitical tensions escalate, AVAV stands to be the biggest beneficiary in our view.” “We continue to see multiple avenues for 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 deploying drone technology, and that conflicts in both Ukraine and Iran are becoming more urgent.
“We knew this tipping point would come sooner or later,” he said, adding that recent conflicts had pushed drone technology “to the forefront.”
AeroVironment said its acquisitions of BlueHalo and Empirical Systems Aerospace increased its revenue by $282.3 million in the quarter.
—CNBC’s Chris Eudaily contributed reporting
Aerovironment stock price chart.
