TLDR
- Joby Aviation agreed to acquire defense tech firm Resonant Sciences for ~$500 million ($450M cash, $50M stock)
- JOBY stock fell 6.5% in premarket trading on the news
- Joby also launched a new at-the-market equity program worth up to $750 million, raising dilution concerns
- Upon closing, Resonant will become Joby’s dedicated defense division; commercial air taxi operations remain separate
- JPMorgan has an Underweight rating on JOBY with a $7 price target, implying 32% downside
Joby Aviation is making a big move into defense. The air taxi company announced Tuesday it will acquire Ohio-based Resonant Sciences for approximately $500 million.
JOBY stock fell 6.5% in premarket trading following the announcement, before paring losses to trade up roughly 1% on the day.
The deal will be funded with $450 million in cash and $50 million in Joby common stock. It is expected to close in the first half of 2027.
Resonant Sciences designs, manufactures, and delivers advanced radio-frequency and mission systems for U.S. national security customers. Once the deal closes, Resonant will become Joby’s dedicated defense business unit.
The combined company will have around one million square feet of manufacturing, integration, and testing space across the Dayton, Ohio region.
Joby’s commercial air taxi business will continue operating separately, focused on electric vertical take-off and landing (eVTOL) aircraft for civilian use.
On the same day, Joby also announced a new at-the-market equity program worth up to $750 million. Management is not required to sell the full amount immediately. The program gives the company flexibility to issue new stock over time.
That flexibility comes at a cost. The prospect of additional dilution gives investors another factor to weigh as Joby continues spending heavily ahead of commercialization.
JPMorgan Sees Progress, But Stays Bearish
JPMorgan analyst James Kirby acknowledged positive developments in Joby’s operations. Five aircraft are currently flying, with another 12 moving through production, up four from the previous quarter.
Joby is also preparing to launch flights under the eVTOL Integration Pilot Program in Texas next month. Passenger flights could begin before year-end, ahead of full commercial certification.
Kirby noted that carrying passengers before full certification would be “an incremental positive for AAM.”
However, Kirby flagged concerns about the pace of FAA certification. Stage 5 advanced five percentage points during the quarter, while Stage 4 moved just one percentage point. Kirby said “investors were hoping for more tangible progression.”
Kirby maintained his Underweight (Sell) rating and $7 price target on JOBY, saying “the current progress is fully baked in.” That target represents 32% downside from current levels.
Wall Street Remains Split
Wall Street is divided on the stock. The consensus rating is Hold, based on 2 Buys, 2 Holds, and 1 Sell.
The average price target of $13.13 implies roughly 49% upside over the next 12 months.
Joby estimates its total addressable market could eventually reach $200 billion to $300 billion over several decades, though certification, competition, and an unproven business model leave considerable uncertainty ahead.
The deal with Resonant Sciences remains subject to regulatory approval and is expected to close in early 2027.
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