AeroVironment Keeps Falling. Should You Be Buying?

1 week ago 6

Rich Duprey

Thu, March 12, 2026 astatine 7:38 AM CDT 4 min read

AeroVironment (AVAV) saw its Switchblade loitering munitions and Puma/Raven reconnaissance drones summation renewed request from Middle East operations, but the Space Force’s determination to recompete the SCAR program, which represented a important contract, triggered a stop-work bid and forced the institution to trim full-year guidance contempt maintaining eligibility to rebid with a lower-cost solution.
The U.S.-Israeli struggle with Iran drove archetypal momentum for AeroVironment’s unmanned systems, but the Pentagon’s propulsion to unfastened SCAR to aggregate suppliers and hole supply-chain weaknesses created near-term uncertainty that overshadowed the company’s different robust backlog and diversified drone portfolio.
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AeroVironment (NASDAQ:AVAV) appeared acceptable for liftoff erstwhile the U.S.-Israeli struggle with Iran erupted, thrusting its battle-tested Switchblade loitering munitions and reconnaissance drones into the spotlight. Demand for these precision systems was expected to surge arsenic the Pentagon leaned harder into unmanned operations to bounds unit exposure.

Yet that momentum evaporated overnight erstwhile the U.S. Space Force announced it would recompete the Satellite Communication Augmentation Resource (SCAR) programme -- AeroVironment's azygous largest contract. The rebid instantly formed a shadiness implicit a sizable portion of the company’s backlog.

Compounding the blow, AeroVironment’s just-reported fiscal third-quarter results fell abbreviated of Wall Street expectations portion absorption prudently trimmed full-year guidance to bespeak ongoing uncertainty. That caused shares to tumble again, leaving the banal down astir 50% from its caller high.

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Is the selloff due for the circumstances oregon is this dip a genuine buying opportunity?

AeroVironment has carved retired a commanding niche successful the Pentagon’s accelerating pivot to drone-centric warfare. Its Switchblade household delivers portable, precision strikes against high-value targets, portion Puma and Raven systems supply persistent intelligence, surveillance, and reconnaissance successful contested airspace. These platforms person already demonstrated their worth successful Ukraine and are present drafting caller involvement amid the existent Middle East operations.

The 2025 BlueHalo acquisition layered successful abstraction and counter-drone technologies, including the BADGER phased-array antennas primitively tied to SCAR. That enlargement positioned AVAV crossed air, space, and cyber domains -- precisely wherever the Defense Department wants integrated solutions. Recent multi-million-dollar Army orders for upgraded Switchblades underscore that halfway request is intact, autarkic of immoderate azygous contract.

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