How AeroVironment's $95.9 Million Army Contract Win (AVAV) Has Changed Its Investment Story

• In October 2025, AeroVironment was selected to deliver the U.S. Army's Next-Generation Counter-Unmanned Aircraft System Missile, securing a US$95.9 million contract for its Freedom Eagle FE-1 platform under the Long-Range Kinetic Interceptor program.
• This selection signals a shift in U.S. defense procurement by challenging the dominance of established missile manufacturers and highlighting AeroVironment's rising profile in advanced counter-drone systems.
• We're looking at how AeroVironment's major Army contract win for FE-1 could reshape its investment outlook and growth narrative.

Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.

AeroVironment Investment Narrative Recap

To own AeroVironment stock, you need to believe in continued global defense modernization and persistent demand for unmanned and counter-drone systems. The recent US$95.9 million Army contract win for the FE-1 missile validates AeroVironment’s technology and strengthens its position in next-generation defense, but it does not directly address the company’s largest risk: high dependence on U.S. government contracts and potential budget swings that could impact short-term revenue consistency.

Among recent announcements, AeroVironment’s contract for the U.S. Army’s Human-Machine Integrated Formations (HMIF) software solution stands out. This highlights the company’s push into advanced mission planning and autonomy management, connecting directly to the catalysts driving defense sector spending and further diversifying its product portfolio beyond hardware-dependent revenues.

But with AeroVironment’s exposure to U.S. budget cycles and shifting DoD priorities, it’s especially important for investors to understand the potential impact if...

Read the full narrative on AeroVironment (it's free!)

AeroVironment's outlook anticipates $2.6 billion in revenue and $264.5 million in earnings by 2028. This projection calls for 47.0% annual revenue growth and an earnings increase of $220.9 million from current earnings of $43.6 million.

Uncover how AeroVironment's forecasts yield a $384.00 fair value, in line with its current price.

Exploring Other Perspectives

Eight members of the Simply Wall St Community estimated AeroVironment’s fair value between US$171,000 and US$384,000 per share before this contract win. While expectations differ widely, your view on the risks tied to AeroVironment’s dependence on domestic defense contracts may shape how you interpret these valuations and the stock’s future.

Explore 8 other fair value estimates on AeroVironment - why the stock might be worth as much as $384.00!

Build Your Own AeroVironment Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AeroVironment research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free AeroVironment research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AeroVironment's overall financial health at a glance.

Contemplating Other Strategies?

Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay:

• Explore 28 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.
• The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 26 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement.
• The end of cancer? These 27 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com