TLDR
- AeroVironment shares rocketed over 16% on January 5, 2026, closing at $291.59 after announcing nearly $900M in new military contracts
- The drone maker locked in an $874M five-year deal with the U.S. Army covering multiple unmanned aircraft platforms and counter-drone technology
- Q2 financials showed revenue exploding to $472.5M from $188M year-over-year thanks to the BlueHalo merger
- Options traders went bullish with call volume hitting $2.57M versus just $195K in puts across 49 unusual trades
- The stock smashed through $300 intraday on volume 43% higher than usual as institutions control nearly 87% of shares
Drone Maker Climbs 16% After Landing Nearly $900M in Army Deals
Shares of AeroVironment exploded higher on January 5, climbing more than 16% as traders reacted to fresh defense contract announcements. The stock closed at $291.59 after touching $302.49 during the session.
The company landed two separate Army contracts totaling roughly $887M. The larger deal covers $874.26M over five years. The smaller one adds another $13.2M to the pile.
Volume told the story. More than 2.3 million shares traded hands, running 43% above the daily average. Buyers showed up early and kept buying.
The bigger contract covers a range of drone systems. JUMP 20, P550, and Puma platforms all made the list. Counter-unmanned aircraft systems came with the package too.
These aren’t hobby drones. The P550 handles long-range reconnaissance missions. AI capabilities let these systems operate with minimal human input. That’s what the Army wants.
Options Activity Signals Confidence
Traders made their bets clear through options. Calls dominated the action with $2.57M in volume. Puts barely registered at $195K.
Forty-nine unusual options trades caught attention. That kind of activity doesn’t happen without reason. Someone sees value at these prices.
The $13.2M contract focuses on P550 aircraft for the Army’s long-range reconnaissance program. Intelligence gathering and surveillance define these missions. The platform delivers both.
Institutional money already owns 86.38% of outstanding shares. That concentration suggests professional investors did their homework. When smart money holds that much stock, the story usually checks out.
The technical breakout matters. AeroVironment spent time consolidating before this move. Breaking $300 confirmed buyers have control.
Revenue Growth Backs The Rally
Second quarter numbers justify the excitement. Revenue hit $472.5M versus $188M in the prior year. That’s 151% growth in twelve months.
BlueHalo’s acquisition drove much of the increase. The deal closed and immediately impacted results. Management made a smart move.
The company reported a $17.1M net loss for the quarter. Amortization expenses and purchase accounting created the red ink. Strip those out and the picture improves.
Adjusted EBITDA came in at $45M. That metric shows real operational performance. The business generates cash despite reported losses.
New bookings reached $1.4B with a book-to-bill ratio sitting at 2.9. Orders are coming in faster than revenue ships out. That creates a solid backlog.
Gross margins hit 26.5%. That’s healthy for a defense contractor. The debt-to-equity ratio of 0.19 keeps balance sheet risk low.
Current ratio stands at 5.1. The company can cover short-term obligations five times over. Liquidity isn’t an issue.
Technology Edge Drives Demand
The Army contracts highlight AeroVironment’s technology leadership. Autonomous systems and AI integration separate these products from competitors.
Laser weapon systems add another dimension. AeroVironment delivered counter-drone capabilities that physically disable threats. Defense and offense capabilities come in one package.
JUMP 20 brings vertical takeoff and landing features. Puma excels at tactical reconnaissance. P550 handles the long-range intelligence work.
Each platform serves a specific mission. The Army doesn’t buy generic equipment. These systems solve real battlefield problems.
The $874M contract runs for five years. That provides revenue visibility and planning stability. Defense budgets can shift but multi-year deals create cushion.
The leverage ratio of 1.3 keeps debt manageable. Combined with strong cash generation, AeroVironment maintains financial flexibility. That matters when investing in research and development.
The stock broke through consolidation on confirmed volume with heavy institutional ownership backing the move at $291.59 per share on January 5, 2026.
