AeroVironment Secures $465 Million Army Contract for Laser Weapon Systems
AeroVironment (NASDAQ: AVAV) has secured its first-ever production contract in the directed-energy weapons space, valued at $464.8 million from the U.S. Army under the Enduring-High Energy Laser program. The deal involves producing multiple units of AeroVironment’s LOCUST X3 laser weapon system to counter small drones on modern battlefields. This marks a significant milestone as it is the first production contract for directed-energy systems in U.S. history, transitioning these weapons from prototypes into full-scale deployment. Despite this landmark win, AVAV stock has declined nearly 40% year-to-date and trades near its 52-week low due to trailing losses of about $265 million over the past twelve months. Analysts maintain a Moderate Buy rating with an average price target suggesting potential upside for investors. Institutional ownership remains strong as net buying continues ahead of AeroVironment’s earnings report on September 9. The contract aligns with AeroVironment's growing counter-drone business, which is part of its broader defense technology portfolio that includes UAS and loitering munitions like the Switchblade drones. The company currently holds a $1.2 billion backlog and faces pressure to deliver strong future earnings growth as it trades at a high forward valuation.
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