AeroVironment (AVAV), the defense technology company known for its next-generation unmanned systems and precision-strike solutions, has been on an impressive ascent. Over the past three months, its stock has surged over 112%, including a notable 21.6% jump on June 25 following a blowout fiscal Q4 earnings report.
This rally in AVAV stock reflects the robust demand for its specialized defense solutions, particularly its Loitering Munition Systems (LMS), which include Switchblade drones. These systems have become increasingly vital in modern warfare, delivering precision strikes and real-time intelligence.
AeroVironment Delivers Robust Q4 Performance
Demand for AeroVironment’s battle-proven technology is accelerating, as reflected in its latest financial results. The company posted $275 million in revenue for Q4, a 40% jump compared to the same period last year.
Furthermore, AeroVironment concluded fiscal 2025 with record revenue of $821 million, representing a 14% year-over-year increase, despite lower revenue from Ukraine, an area that has been supporting its growth. Still, Ukraine contributed 18% of total annual revenue and 12% of Q4 revenue. Management expects this to shrink to under 5% in FY 2026, though orders for upgrades to existing fleets, such as the Puma and Switchblade drones, continue to come in. This transition marks a pivot toward a more diversified revenue base.
That diversification is evident in AeroVironment’s international footprint. More than half of its revenue came from overseas markets, with non-Ukraine European nations making up over 24%. Orders from eight different countries for its Switchblade drones totaled nearly $250 million in FY2025, while international demand for its JUMP 20 system — a medium uncrewed aircraft system (MUAS) — generated close to $100 million in orders in the fourth quarter alone. Over half of those JUMP 20 orders were from outside the U.S.
From a product standpoint, AeroVironment’s LMS division ended the year with $138.3 million in revenue in Q4, primarily driven by the Switchblade 600 platform, which contributed roughly 80% of that total. Its Uncrewed Systems (UxS) segment also performed strongly, pulling in $112.6 million, up 9% year-over-year. The Puma drones made up over half of the UxS revenue, while JUMP 20 contributed nearly 20%.
AVAV’s Robust Backlog and Bookings Support Future Growth
Adding to the positives are the company’s stellar bookings and funded backlog. AeroVironment reported $1.2 billion in total bookings and a year-end funded backlog of $726 million, an 82% increase from the prior year. These figures highlight the company’s future revenue growth potential, pointing to sustained demand for AeroVironment’s suite of defense technologies.
Strategically, the company is expanding its capabilities. The recent acquisition of BlueHalo solidifies its position as a comprehensive defense tech provider, now offering all-domain solutions that span air, land, sea, space, and cyber. This acquisition fits seamlessly into AeroVironment’s broader strategy to align with the evolving needs of modern warfare and national defense.
Looking ahead, AeroVironment’s management has issued bullish guidance, forecasting revenue between $1.9 billion and $2 billion for fiscal year 2026, more than double FY25’s figure. This aggressive growth outlook reflects rising demand, enhanced production capacity, and a steady pipeline of innovation.
AeroVironment’s New Product Rollouts Strengthen Market Position
The company’s commitment to R&D and innovation is yielding results. In FY25, it rolled out three new advanced systems. These new offerings expand AeroVironment’s product portfolio and address the evolving tactical requirements of global military clients, strengthening its position as a next-generation defense contractor.
Analyst Remains Bullish on AeroVironment
Given the solid demand environment, strong order flow, and robust growth trajectory, Wall Street analysts have assigned a “Strong Buy” consensus rating to the stock. However, the recent stock rally has pushed AeroVironment’s share price above the average analyst price target and the Street-high price target. This indicates that much of the positives are already reflected in the stock price.
Conclusion: Can the Rally Continue in AeroVironment Stock?
In summary, while AeroVironment’s recent run-up has been nothing short of stellar, the company’s fundamentals and solid demand suggest that the rally may not be over yet. However, it would be wise to keep this defense technology company on your radar and consider a long position if the stock takes a breather before rallying again.
