TLDR
- AeroVironment stock rose nearly 8% in premarket trading after a report said the Trump administration is evaluating funding agreements with U.S. drone companies.
- The Wall Street Journal reported Pentagon officials have held talks for months with private drone makers to strengthen domestic production and lower procurement costs.
- AVAV currently trades at $181.28, well off its 52-week high of $417.86, with a consensus analyst price target of $318.78 and a “Moderate Buy” rating.
- The company missed its most recent quarterly earnings, posting $0.64 EPS on $408.05 million in revenue, versus estimates of $0.68 EPS and $487.94 million.
- AeroVironment also received a $20.2 million government-backed investment to expand its Huntsville, Alabama facility for counter-drone missile production.
Drone stocks got a boost Thursday after a Wall Street Journal report said the Trump administration is weighing funding deals with several U.S. drone manufacturers. AeroVironment (AVAV) was among the biggest movers, climbing nearly 8% in premarket trading. The stock opened at $181.28.
The report said Pentagon officials have spent months in talks with private drone makers. The goal is to strengthen domestic production capacity and bring down procurement costs for military drone technology.
The Office of Strategic Capital — a federal unit created to back companies tied to national security supply chains — was also named as part of the discussions.
Drone stocks just got a new government-backed catalyst…
Red Cat $RCAT, Kratos $KTOS and Ondas $ONDS rallied after reports that the Trump administration is exploring Pentagon-backed funding deals for U.S. drone companies 👀
Could drones become the next big defense trade? pic.twitter.com/ezc2jcjWAt
— Wall St Alpha (@WallStAlphaPro) May 28, 2026
Other drone stocks moved sharply on the news. Unusual Machines surged more than 30% before the open, while Red Cat Holdings gained around 13%. Kratos Defense & Security Solutions rose more than 8%.
Companies mentioned as possible funding candidates include Performance Drone Works, which holds a U.S. Army reconnaissance drone contract, and Neros Technologies, a startup focused on first-person-view drones. Unusual Machines, which is backed by Donald Trump Jr., was also named.
Earnings Miss Weighs on AVAV
Despite the premarket jump, AVAV remains under pressure from a weak earnings report. The company posted $0.64 EPS for the most recent quarter, missing the consensus estimate of $0.68. Revenue came in at $408.05 million, well short of the $487.94 million analysts expected.
Revenue was up 143.4% year over year, compared to $0.30 EPS in the same quarter last year. The company set FY2026 guidance at $2.75 to $3.10 EPS, with analysts projecting $2.94 for the full year.
The stock sits well below its 52-week high of $417.86 and above its 52-week low of $156.00. Its 50-day moving average is $185.65 and its 200-day moving average is $243.59.
Wall Street holds a consensus “Moderate Buy” rating on AVAV, with an average price target of $318.78. Several analysts cut their targets earlier this year but kept buy-equivalent ratings. Needham trimmed its target from $450 to $400, BTIG cut from $415 to $330, and Canaccord moved from $330 to $300.
Legal Overhang Adds Uncertainty
AeroVironment also faces a legal overhang. Securities-fraud and class-action lawsuits have been filed, citing alleged misleading statements tied to competition risks in a satellite communications program. The filings don’t change the company’s fundamentals directly but add uncertainty for investors.
On the positive side, AeroVironment secured a $20.2 million government-backed investment to expand its Huntsville, Alabama facility. The funding supports higher production of its Freedom Eagle-1 interceptor and accelerates work on next-generation counter-drone missiles.
Seven Grand Managers LLC cut its AVAV position by 50% in Q4, selling 60,000 units and leaving it with 60,000 remaining, worth around $14.51 million. Institutional investors and hedge funds hold 86.38% of the stock.
The company’s CAO and CFO both sold stock in March, with the CAO selling 200 units at $212.52 and the CFO selling 396 at $224.55.
🚨 Our MAY Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for May, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
