What Happened?

Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) jumped 8% in the afternoon session after the company was selected for a $499 million U.S. Air Force contract and announced enhancements for its Puma LE unmanned aircraft system. 

The 10-year contract was awarded by the U.S. Air Force Research Laboratory for its HELMSSMAN program. In separate news, AeroVironment launched capability upgrades for its Puma LE drone, including an integrated Laser Target Designator. This new feature transformed the aircraft into a precision targeting platform. The positive developments prompted Baird analyst Peter Arment to raise the price target on the stock to $350 from $267, reflecting strong confidence in the company's potential. This wave of good news fueled investor optimism and pushed the company's stock to a new all-time high.

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What Is The Market Telling Us

AeroVironment’s shares are very volatile and have had 22 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 9 days ago when the stock gained 3.1% on the news that the company announced it was awarded a new firm-fixed-price contract option by the U.S. Space Force to deliver two advanced antenna systems. 

The deal covered the supply of two BADGER phased array antenna systems to support the Satellite Communication Augmentation Resource (SCAR) program. This program aimed to rapidly enhance satellite control capacity for the nation's Satellite Control Network. This award marked the first option exercised under the SCAR agreement. AeroVironment noted that most key development milestones were already completed and that it had accelerated production and strengthened its supply chain to meet demand. The company planned to deliver the first BADGER unit to the Space Force in the coming months, with more units nearing completion for delivery in early 2026 to support a full-scale overseas deployment.

AeroVironment is up 118% since the beginning of the year, and at $340.60 per share, has set a new 52-week high. Investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $5,535.

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