Quick Read
-
AVAV jumped 6% on the Army's first-ever directed-energy production contract worth $465 million, pulling RCAT up 3% on counter-drone read-across.
-
DRNZ outpaced SPY 1% to 0.3% on the session, while KTOS and ONDS sat down 37% and 22% YTD heading into Thursday's bid.
-
LOCUST X3 deliveries span multiple years and fiscal 2027 revenue is back-half weighted, so the contract's financial lift arrives gradually.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut.
A first-of-its-kind U.S. Army directed-energy production contract has reshaped the counter-drone trade Thursday morning, lifting AeroVironment, Inc.( NASDAQ:AVAV ) shares while smaller drone-defense names ride the read-across. The REX Drone ETF( NASDAQ:DRNZ ) is up 1%, and the SPDR S&P 500 ETF Trust( NYSEARCA:SPY ) is up 0.3%, signaling a sector-specific bid rather than a broad risk-on session.
AeroVironment stock is up 6% to $153.93 after the company landed a $464.8 million Enduring-High Energy Laser production contract from the U.S. Army. Also catching a bid on the counter-drone read-across, Unusual Machines( NYSEAMERICAN:UMAC ) shares are up 1% to $23.89 without an award of their own. Red Cat Holdings( NASDAQ:RCAT ) stock is climbing 3% to $8.57 as investors extend the theme to the smaller pure plays in the group.
The broader directed-energy and counter-UAS cluster is participating too, with Ondas Inc.( NASDAQ:ONDS ) and Kratos Defense & Security Solutions( NASDAQ:KTOS ) both ticking higher alongside the featured movers. That group has spent much of the year as a defense-sector laggard, making Thursday's coordinated bid notable.
First Production Award for Directed Energy
AeroVironment disclosed a $464.8 million award from the U.S. Army Portfolio Acquisition Executive for Fires, funding delivery of dozens of LOCUST X3 laser weapon systems under the Enduring-High Energy Laser program. It's the first production contract for directed energy in U.S. history, moving laser weapons from prototype work into fielded units built to defeat group 1 through 3 unmanned aircraft threats.
Free Report, Just Released
Did Any of Your Stocks Make the Top 10 List?
It is an uncomfortable question, and there is now an answer to it.
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember.
The report is free. Put the ten next to what you own and find out which is which.
Enter Your Email and See the Ten →
Free from 24/7 Wall St. It lands in your inbox.
The LOCUST X3 is a 30-kilowatt platform-agnostic system built to integrate with the Army's Joint Light Tactical Vehicle, with palletized configurations and Infantry Squad Vehicle integration under evaluation, according to AeroVironment, Inc.. AeroVironment is supporting the production ramp with a $30 million expansion of its Albuquerque, New Mexico facility announced in March, according to AeroVironment, Inc..
On the fiscal fourth-quarter call, management previewed Enduring High Energy Lasers as "about a half a billion dollar program in size total," so Thursday's award sits near the top of that framing. AeroVironment also flagged that the FAA cleared directed-energy systems like LOCUST for domestic airspace earlier this year, widening the pool of protectable assets beyond overseas theaters.
AeroVironment CEO Wahid Nawabi called the deal "a defining moment not only for AV, but for the future of modern defense." Directed Energy Systems Vice President John Garrity added that "E-HEL is not a future capability, it is a production-ready system, built on proven technology, and designed to meet the demands of today's fight while scaling for tomorrow's threats."
Counter-Drone Peers Catch the Read-Across
Unusual Machines and Red Cat had no matching award, so their moves reflect sector sentiment rather than a company-specific catalyst. Both names benefit from the same NDAA-compliance and counter-UAS demand story that has driven their sharp revenue ramps this year, and both carry meaningful cash cushions relative to market cap.
Ondas fits the same directed-energy and counter-drone cluster through its Sentrycs and Iron Drone brands, along with a Mistral unit that participates in a U.S. Army loitering munitions program. Kratos offers a bigger-cap read on the theme, and management flagged its own $160 million directed-energy counter-UAS award during the second-quarter call in August.
Uneven Scoreboard Through Wednesday's Close
The scoreboard heading into Thursday told very different stories across the featured group. AeroVironment stock was down 40% year to date (YTD) through Wednesday's close, turning today's bounce into a news-driven rally against a broken chart rather than the continuation of a trend that was already running higher.
Unusual Machines stock was up 85% YTD, the clear outlier and proof that the same counter-drone theme has paid very differently depending on the name. Red Cat stock was up 5% YTD, close to flat and giving today's bid a little more room to run before it meets meaningful technical resistance.
The broader cluster tells a similarly split story. Ondas stock was down 22% YTD, and Kratos stock was down 37% YTD, leaving the counter-drone theme with plenty of room to catch up if additional production awards follow.
What to Watch Next
The unresolved question for AeroVironment is whether a first-of-its-kind production award changes the trend or simply interrupts a rough year. LOCUST X3 deliveries stretch across multiple years, so the impact on financial results filters in gradually rather than in a single quarter, and management has already flagged that fiscal 2027 revenue is weighted toward the back half.
For AeroVironment's counter-drone peers, the read-across only holds if additional Army and Navy counter-UAS awards follow through the fall. Investors sizing their exposure to this cluster should consider modest positions given the year-to-date volatility already visible above and the tendency of contract-driven moves to fade once the initial headline is digested.
Got $1,000? Before You Buy Another Stock, Read This
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the cut -->>
Contact editorial@247wallst.com for any questions or corrections.
