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    Laser Weapons, NASA Mars Drones Could Be A Game Changer For AeroVironment (AVAV)

    Simply Wall St·09/07/2026 11:19:29
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    • AeroVironment recently announced a historic US$464.8 million U.S. Army production contract for its LOCUST X3 laser weapon systems under the Enduring-High Energy Laser program, alongside fresh orders for Switchblade 600 loitering munitions and a co-development role on NASA’s SkyFall Mars helicopters.
    • These wins both extend AeroVironment’s reach from battlefields to planetary exploration and deepen its role in emerging laser and unmanned systems technologies.
    • Next, we’ll examine how securing the first U.S. production contract for laser weapon systems may reshape AeroVironment’s investment narrative.

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    AeroVironment Investment Narrative Recap

    To own AeroVironment, you need to believe it can turn its growing directed energy and unmanned systems portfolio into durable, profitable contracts despite recent losses and heavy reliance on U.S. defense spending. The historic US$464.8 million LOCUST X3 laser production award directly reinforces the near term revenue catalyst of scaling new programs, but it also sharpens the key risk that earnings remain volatile if a few large U.S. contracts slow, slip, or are reprioritized.

    Among the recent announcements, the US$51 million follow on order for Switchblade 600 loitering munitions is most relevant here, because it highlights how AeroVironment is trying to build a recurring base around its core UAS products while ramping newer technologies like lasers. Together with the E HEL award, it reinforces the central catalyst of contract scale up, but it does not fully offset concerns about margin pressure and dependence on U.S. government demand.

    Yet against these contract wins, there is a less discussed dependence on a handful of government programs that investors should be aware of...

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

    AeroVironment's narrative projects $3.0 billion revenue and $160.6 million earnings by 2029. This requires 14.3% yearly revenue growth and a $425.7 million earnings increase from -$265.1 million today.

    Uncover how AeroVironment's forecasts yield a $225.77 fair value, a 56% upside to its current price.

    Exploring Other Perspectives

    AVAV 1-Year Stock Price Chart
    AVAV 1-Year Stock Price Chart

    Compared with the consensus view, the lowest analysts were already cautious, assuming about US$2.9 billion of revenue and US$141 million of earnings by 2029, and they worry that relying on a few large government contracts could still make AeroVironment’s results unpredictable even after a headline E HEL win.

    Explore 9 other fair value estimates on AeroVironment - why the stock might be worth just $148.57!

    Reach Your Own Conclusion

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    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.