AVAV Stock Jumps 8% On Reported $400M Army Deal — Why Retail Sees AeroVironment’s Laser Weapons Moving Beyond Testing

• The U.S. Army plans to buy dozens of Locust systems from AeroVironment, Bloomberg reported.
• The AI-assisted Locust system uses a high-energy laser to track, identify, and help operators destroy small- to medium-sized drones.
• Stocktwits retail traders called the reported Army deal “another major win” for AeroVironment and pointed to the company’s growing backlog and expanding counter-drone opportunity.

AeroVironment Inc. (AVAV) shares jumped over 8% on Friday afternoon following a report that the company is set to win a U.S. Army contract worth at least $400 million for its Locust counter-drone laser system. The reported deal would mark the Pentagon’s first production contract for a directed-energy counter-drone system beyond the prototype phase.

At the time of writing, AVAV stock was trading around 7.5% higher.

AVAV Reportedly Set For $400M Army Deal

The U.S. Army will buy at least $400 million worth of counter-drone lasers from the Arlington, Virginia-based AeroVironment, reported Bloomberg, citing a person familiar with the matter, as militaries seek ways to counter the unmanned systems proliferating across modern battlefields.

The contract with AeroVironment would provide the Army with dozens of the company’s Locust systems, according to the report. The deal would represent the Pentagon’s first production contract for a directed-energy counter-drone system beyond the prototype phase.

The AI-assisted Locust system tracks, identifies, and helps human operators destroy small- to medium-sized drones with a high-energy laser.

The almost half-billion-dollar contract is another sign the Pentagon is seeking more affordable and sustainable ways of downing potentially scores of small- to medium-sized drones, particularly as the conflicts in Ukraine and Iran put pressure on U.S. stocks of expensive, hard-to-replace interceptors, according to the Bloomberg report.

Pentagon Pushes For ‘Drone Dominance’

In addition to counter-drone systems, the Pentagon is also trying to field more offensive drones, with Defense Secretary Pete Hegseth directing the department last year to pursue “drone dominance” by accelerating and expanding the production of U.S. military drones.

Earlier this year, the Locust system was at the center of a minor controversy when the weapon was being tested near the Mexico border and prompted the Federal Aviation Administration to close the airspace in El Paso, Texas.

During testing, the device inadvertently targeted and shot down a drone flown by U.S. Customs and Border Protection personnel on the Texas border with Mexico, according to people familiar with the matter at the time.

AVAV Stock: Retail Sees Bigger Defense Opportunity

On Stocktwits, retail sentiment for AVAV improved to ‘neutral’ from ‘bearish’ over the past 24 hours, while message volume was ‘low’ at the time of writing.

Retail traders on Stocktwits viewed the reported Army deal as another major win for AeroVironment, saying it shows the Pentagon is moving directed-energy weapons from testing to deployment.

One retail trader called the reported deal “another major win” for AVAV, pointing to the company’s growing backlog and recent defense contracts. The trader said the $400 million program shows “directed-energy weapons are moving beyond testing and into real-world deployment,” adding that “the defense cycle continues to strengthen” and AVAV remains among the companies benefiting from the trend.

Another retail trader said the reported contract marks “a major milestone for next-generation counter-drone technology.” The trader added that the deal shows “the Pentagon moving from testing to real battlefield deployment of laser-based drone defense,” while adding that AVAV is “positioning itself at the center of a fast-growing defense market.”

“Production is scaling. Demand is accelerating. The defense tech story is getting bigger,” the trader concluded.

AVAV shares have lost around 27% year-to-date.

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