AeroVironment shares soared 35% on the back of strong demand for drones and a robust earnings report

Shares of drone manufacturer AeroVironment surged 35% in premarket trading on Tuesday, June 30. Investors were encouraged by the company’s earnings report: quarterly earnings and revenue exceeded analysts’ expectations, and AeroVironment’s order backlog for the year soared by 65%. The company is benefiting from growing global demand for drones, counter-drone systems, and space technology.

In premarket trading on Tuesday, June 30, shares of drone and defense technology provider AeroVironment rose nearly 35% to $187.5. During trading on Monday, June 29, AeroVironment shares rose as much as 19% at one point, but by the end of the session, they had lost most of their gains and closed the day with only a slight increase of 0.8%.

The drone manufacturer reported in its fourth-quarter earnings report for fiscal year 2026 that revenue grew 133% year-over-year to $641.6 million—compared to the market’s expectation of $559 million. AeroVironment’s net income was $63.2 million, compared with $16.7 million a year earlier. Full-year revenue increased by 141% to $1.98 billion. Earnings per share were $1.84, while analysts surveyed by LSEG had expected $1.46, according to CNBC.

AeroVironment is well-positioned to capitalize on growing global demand for drones, counter-drone systems, and space technology, said company CEO Vahid Navabi, as reported by CNBC.

AeroVironment's new orders for fiscal year 2026 rose 125% to $2.7 billion, while its funded backlog increased 65% to $1.2 billion.

In a press release, the company noted that the successful completion of these transactions generated $282 million in revenue. Among them were the acquisition of defense technology developer BlueHalo and the purchase of Empirical Systems Aerospace, a manufacturer of aerospace test facilities.

AeroVironment forecasts that revenue for fiscal year 2027 will range from $2.13 billion to $2.23 billion, while LSEG analysts expect $2.17 billion. The forecast for adjusted earnings per share (EPS) is $3.02 to $3.34 per share, while the LSEG consensus is $3.94.

Since the beginning of the year, the drone manufacturer’s stock has lost 42.5% of its value. The company is facing difficult times due to the cancellation of a government contract to supply BADGER phased-array antennas for the SCAR satellite communications program and an accounting error, according to Barron's.

However, AeroVironment sees promising opportunities: the Pentagon’s budget for unmanned systems next year could exceed $75 billion. ““Not only the U.S. Department of Defense, but all of our allies are lagging far behind in terms of the adoption and deployment of these technologies,” Navabi said in an interview with CNBC. “Our armed forces are catching up at an extremely rapid pace.”

Wall Street is unanimous in its assessment of AeroVironment's prospects: all 14 analysts recommend buying the company's stock. The average price target is $270.42, which is 94.5% higher than the closing price on June 29.