Defense stocks rose after the joint U.S.-Israel strike on Iran heightened tensions and boosted expectations for military spending. AeroVironment Inc. (NASDAQ:AVAV) stock gained on Tuesday, supported by both the sector rally and its ongoing U.S. Space Force contract negotiations.
Active Negotiations On Space Force Contract
AeroVironment said it remains in active negotiations with the U.S. regarding its contract to deliver ground stations. Specifically, this agreement includes the deployment of BADGER phased-array antenna systems to support the Satellite Communications Augmentation Resource (SCAR) program.
The company noted the contract was temporarily paused as both parties work toward a firm-fixed-price agreement that would provide a commercialized product solution with an expedited delivery timeline.
AeroVironment said its “innovation and ability to scale ahead of manufacturing remains a key differentiator” and expressed confidence in its ability to successfully deliver systems ahead of competitors.
Manufacturing Expansion In New Mexico
Separately, AeroVironment announced plans to invest more than $30 million to expand its manufacturing footprint in Albuquerque, New Mexico, supported by a $6 million performance-based incentive package from state and local authorities.
The funding includes $5 million from the State of New Mexico and $1 million from the City of Albuquerque under the Local Economic Development Act. The expansion will enhance operations across the company’s three facilities in the Sandia Science & Technology Park, driving capital upgrades and workforce growth.
The company expects the vertically integrated campus to generate more than $670 million in economic impact over the next decade and create more than 450 high-wage jobs. The company currently employs more than 400 people locally and reports nearly 30% year-over-year growth from 2023 to 2026.
The site supports the company’s Space & Directed Energy Group, producing advanced RF systems, satellite communications ground terminals, laser systems, and counter-UAS technologies aligned with U.S. national security priorities.
AVAV Q3 Earnings: High Expectations
AeroVironment is scheduled to report third-quarter fiscal year 2026 financial results after the market closes on March 10, 2026.
- EPS Estimate: 73 cents (Up from 30 cents)
- Revenue Estimate: $483.39 Million (Up from $167.64 Million)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $353.89. Recent analyst moves include:
- Baird: Outperform (Lowers Target to $260.00) (Mar. 3)
- Piper Sandler: Overweight (Lowers Target to $290.00) (Mar. 3)
- Jefferies: Buy (Maintains Target to $390.00) (Mar. 2)
AVAV Price Action: AeroVironment shares were up 8.80% at $226.66 at the time of publication on Tuesday, according to Benzinga Pro data.
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